Net investment refers to
A. exports minus imports.
B. the change in investment spending and the change in government expenditures on infrastructure.
C. the change in inventories over a 1-year period.
D. the change in the capital stock after subtracting out depreciation.
Answer: D
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The saying “the lower the price, the better” may not always be correct for an economy’s public interest because
A. people should have to pay for what they want. B. people will overuse something they perceive as being cheaper than the utility they receive for it. C. the government can no longer afford to provide all the goods and services it provides because it is slowly going broke. D. cheaper prices will make people buy less of other things.
The World Bank sorts countries into the following three major groups:
a. high-income economies, middle-income economies, low-spending economies b. high-spending economies, middle-spending economies, low-spending economies c. super-high-income economies, middle-income economies, low-income economies d. high-income economies, middle-income economies, zero-income economies e. high-income economies, middle-income economies, low-income economies
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model? a. Real GDP rises and nominal value
of the domestic currency falls. b. Real GDP falls and nominal value of the domestic currency remains the same. c. Real GDP rises and nominal value of the domestic currency remains the same. d. Real GDP rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Suppose that an individual sees a tremendous opportunity to produce and sell a new product but dismisses the idea because there is no way to exploit this opportunity for personal gain. This situation best identifies the:
A. coordination problem under communist central planning. B. self-sufficiency dilemma under communism. C. asymmetric information problem under communism. D. incentive problem under communist central planning.