Explain how the “new growth theory” treats technology differently from the way economists used to treat technology. What will be an ideal response? ANSWER Technology used to be treated as an outside factor of growth that could not be explained itself. The new growth theory includes technology as another factor of production and argues […]
Refer to the table above. At what price does the market for notebooks clear? A) $3 B) $4 C) $2 D) $5 ANSWER B
The savings rate designates: A) the difference between household consumption and savings. B) the difference between government revenue and government expenditure. C) the rate of return households earn on their savings. D) the fraction of income that households save. ANSWER D
If an individual borrows $200 at an annual rate of interest of 10%, what is the total amount that he will have to repay after one year? A) $20 B) $220 C) $210 D) $200 ANSWER B
The rate of return that households expect on their savings is determined by: A) exchange rates. B) interest rates. C) government expenditure. D) tax rates. ANSWER B
If an individual borrows $100, and pays back $100 after a year to settle his loan, it implies that the rate of interest is: A) 0 %. B) 100%. C) 1%. D) 10%. ANSWER A
Money serves as a medium of exchange means that A) it benefits both buyers and sellers. B) it eliminates the need for barter. C) it reduces transaction costs. D) All of the above are correct. ANSWER D
How much people plan to consume at various levels of disposable income is known as A) dissaving. B) the consumption function. C) investment. D) inventory investment. ANSWER B
An increase in total planned real expenditures that is caused by a factor other than the price level will lead to the A) aggregate demand curve shifting to the right. B) aggregate demand curve shifting to the left. C) aggregate supply curve shifting to the left. D) aggregate supply curve shifting to the right. […]
The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more […]
