The difference between savings and investment is that
a. investment is purchasing stock, while savings is putting money in a bank.
b. investment is purchasing capital, savings is postponing consumption.
c. investment is purchasing assets, while consumption is purchasing goods.
d. investment increases output, while savings decreases output
Figure 4.1
B
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The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?
A) an upward shift or rotation of the production function B) a downward shift or rotation of the production function C) a movement from point A to point B D) a movement from point C to point B E) None of the above because the effects of an increase in capital cannot be shown in the figure.
An example of unplanned investment is
a. an unexpected fire requires that an entire factory be rebuilt. b. a bridge collapses and requires unexpected repair cost. c. machine tool companies are forced to install new equipment to be able to meet Japanese competition. d. None of these.
If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y, then the opportunity cost of producing the 2,001st unit of good is X is most likely to be
What will be an ideal response?
The most likely advocates for a monetary rule would be:
A. Monetarists B. Real-business-cycle theorists C. Mainstream economists D. Supply-side economists