New growth theory argues that A) growth relies on maintaining lower growth rates of population, especially in less developed countries. B) technology cannot be looked at as an outside factor without an explanation of what drives it. C) technology is the key factor that explains growth but technology is beyond economic explanation itself. D) growth […]
Two goods are said to be substitutes when a fall in the price of one good: A) leads to a left shift in the demand for the other good. B) leads to a rise in the price of the other good. C) doesn’t affect the demand for the other good. D) leads to a right […]
An important foundation of the new growth theory is that A) we will get more technological advances when the rewards for producing them are greater. B) the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. C) we will get more technological advances the […]
Refer to the above figure. Suppose that the economy was originally at point A, and then it reached point C by means of a fiscal policy action. Which of the following is correct? A) Point C is both a short-run equilibrium and a long-run equilibrium that could have been attained through an increase in government […]
In the above figure, saving will equal zero when real disposable income equals A) 500. B) 600. C) 60. D) 0. ANSWER B
Which of the following represents a function of money? A) standard of deferred payment B) medium of exchange C) unit of accounting D) all of the above ANSWER D
In the above figure, when real disposable income equals 600 A) there is dissaving. B) real disposable income exceeds consumption. C) consumption is less than disposable income. D) consumption equals real disposable income. ANSWER D
Holding nominal money balances constant, a decrease in the price level A) causes the real value of the money balances to increase, thereby increasing the interest rate. B) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures. C) causes the real […]
Money is defined as A) a by product of a barter economy. B) any financial instrument that is backed by gold. C) anything people generally accept in exchange for goods and services. D) a person’s net worth. ANSWER C
Which of the following pairs of goods is likely to be considered substitutes? A) A Nokia cell phone and a Nokia cell phone charger B) Coffee and sugar C) Printers and printing ink D) A Ford car and public transportation ANSWER D
