What is the economic role of a patent? What will be an ideal response? ANSWER A patent grants the inventor the exclusive right to make, use, or sell an invention for 20 years. This gives the inventor property rights on the invention, which enables the inventor to profit from the invention. The number of […]
Date: September 2nd, 2020
Which of the following statements is true? A) In a closed economy, government spending equals zero. B) A nation with a high savings rate will accumulate capital rapidly. C) A nation with a high savings rate will accumulate capital slowly. D) In a closed economy, aggregate consumption equals zero. ANSWER B
Date: September 2nd, 2020
If lenders refuse to state the debt in terms of dollars, then dollars are not a A) medium of exchange. B) unit of accounting. C) store of value. D) standard of deferred payment. ANSWER D
Date: September 2nd, 2020
If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government’s action would result in A) a Ricardian dilemma. B) a direct expenditure offset. C) an increase in real Gross Domestic Product (GDP). D) a reduction of the government deficit. ANSWER B
Date: September 2nd, 2020
Which of the following statements is true? A) Models help economists to explain the past, but do not help in predicting the future. B) The scientific method used by economists is based on idealism and not empiricism. C) Testing with data enables economists to distinguish between good models and bad models. D) Models that economists […]
Date: September 2nd, 2020
In a closed economy, without the government: A) savings equals net exports. B) consumption equals investment. C) consumption equals savings. D) savings equals investment. ANSWER D
Date: September 2nd, 2020
The total interest that a borrower has to pay on a loan is equal to the: A) principal plus the rate of interest. B) principal divided by the rate of interest. C) principal minus the rate of interest. D) principal times the rate of interest. ANSWER D
Date: September 2nd, 2020
An aggregate demand curve A) shifts to the right when the price level increases and to the left when the price level falls. B) shifts to the right when population decreases and shifts to the left when population increases. C) does not shift, unlike individual or market demand curves. D) shifts to the right when […]
Date: September 2nd, 2020
The consumption function will shift with A) a decrease in real disposable income. B) a change in saving. C) a change in household wealth. D) an increase in real disposable income. ANSWER C
Date: September 2nd, 2020
The property of money that allows for the settling of debts that mature in the future is A) store of value. B) liquidity. C) acceptability. D) standard of deferred payment. ANSWER D
Date: September 2nd, 2020
