Which of the following is an example of capital?
a. a cheeseburger dinner
b. a construction worker
c. petroleum
d. a factory
e. an acre of farmlqnd
Answer: d. a factory
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Which of the following is not crucial to the Harrod-Domar model?
a. population growth rate b. marginal propensity to save c. incremental capital-output ratio d. marginal propensity to consume e. all were crucial to the Harrod-Domar model
A reduction in the money supply will result in:
A) a lower interest rate and more negative output gap B) a higher interest rate and more positive output gap C) a lower interest rate and more positive output gap D) a higher interest rates and more negative output gap
What effect did the decrease in the value of the dollar have on the U.S. trade deficit in the period from 2006 to 2009?
a. It decreased the trade deficit as Americans bought more U.S. capital goods. b. It decreased the trade deficit as foreigners were attracted to the increased value of U.S. products and Americans bought fewer imports. c. It increased the trade deficit as U.S. investors bought more domestic financial assets. d. It increased the trade deficit as Americans bought more imports and foreigners bought fewer U.S. products.
If the inflation rate is larger than the nominal interest rate, the real interest rate is
A. zero. B. positive. C. negative. D. either positive or zero.