Which of the following explains why investment may be procyclical?
a) high installation costs for replacing, updating, and expanding the capital stock
b) simultaneous investment by firms in various industries throughout the economy
c) the correlation between current profits and investment expenditures
d) the basing of expectations on current conditions
e) all of the above
e) all of the above
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"In the classical model, the equilibrium level of real Gross Domestic Product (GDP) is completely supply-determined." Do you agree or disagree? Why?
What will be an ideal response?
Which of the following policies is designed specifically to directly promote technological change in an economy?
A) laws to strengthen property rights B) government subsidization of research and development C) tax incentives to promote investment in 401K plans D) a vaccination program to combat infectious diseases
Table 35.1CountryTons of SoybeansComputerChina100300United States150750Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 ton of soybeans in the United States is
A. 1/3 of a computer. B. 1/5 of a computer. C. 3 computers. D. 5 computers.
Excess reserves
A. Are loans made at above market interest rates B. Are reserves banks keep above the legal requirement C. Are reserves banks keep to meet the reserve requirement