According to Keynes, once a system attains an economy-wide equilibrium A) planned investment will be zero. B) there may or may not be excess productive capacity. C) the economy will be at full productive capacity. D) planned consumption will be zero. ANSWER B
Date: September 2nd, 2020
The additional payment a borrower has to make on a loan is referred to as: A) credit. B) stock. C) principal. D) interest. ANSWER D
Date: September 2nd, 2020
How does innovation differ from invention? Why is innovation required for economic growth? What will be an ideal response? ANSWER Innovation involves the transformation of an invention into something that benefits the economy by lowering production costs or by providing a new good or service. It is innovation, then, that stimulates economic growth.
Date: September 2nd, 2020
Refer to the table above. What is the equilibrium price of notebooks? A) $4 B) $6 C) $2 D) $7 ANSWER A
Date: September 2nd, 2020
Which of the following statements is true? A) Out of two loans, the interest accumulated after the end of a year will be more on the one that is a larger principal. B) Banks are the only financial institutions that lend money and do not accept deposits. C) Out of two loans, the interest accumulated […]
Date: September 2nd, 2020
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
