Assume the following situation. In year 1, a $400 capital stock generates a $100 GDP. One-fifth, or $20 of the $100 GDP, is put into investment. Assuming a constant capital/output ratio and no depreciation, the potential rate of GDP growth for this simple economy is
a. no growth
b. 2 percent
c. 5 percent
d. 10 percent
e. 20 percent
C
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Because we face scarcity, every choice involves
A) money. B) the question "what." C) giving up something for nothing. D) an opportunity cost.
Which of the following is NOT a method for promoting global economic growth?
A) reliance on private markets to direct capital goods toward their best use B) Count on the world's governments to develop policies that promote economic growth in developing nations. C) Encourage population growth so that developing nations' labor supply increases. D) market based approach
Which of the following assets are counted in M2?
A) gold B) balances in retail mutual funds accounts C) value of outstanding bonds D) lines of credit offered by commercial banks
The costs which can be avoided if we alter our decisions or choices are referred to as:
a. average costs. b. opportunity costs. c. marginal costs. d. sunk costs.