Many countries find it difficult to achieve economic growth. This is because economic growth A) depends on technological change and technological change depends on noneconomic factors such as the growth rate of scientific knowledge. B) is not understood well by economists, so it is difficult to advise policy makers on the best policies to pursue. […]
When a change in the price level causes a change in the purchasing power of currency, which then changes planned real expenditures at all income levels, it is called A) the real-balance effect. B) the open-economy effect. C) the substitution effect. D) the interest rate effect. ANSWER A
Economic growth tends to be higher in a country that A) has an open economy that encourages the rapid spread of technology. B) does not grant patents to investors. C) has a low saving rate. D) has an undeveloped system of property rights. ANSWER A
Savings are an example of A) a depreciation concept. B) a flow concept. C) a stock concept. D) an investment concept. ANSWER C
The classical economists assumed that A) wages and prices were inflexible, especially downward. B) government intervention in the economic system was necessary and helpful. C) monopoly was widespread in the economy. D) wages and prices were flexible. ANSWER D
________ is the study of how individuals, households, governments, and firms make choices and how those choices affect prices, the allocation of resources, and the well-being of other agents. A) Macroeconomics B) Monetary economics C) Microeconomics D) Growth theory ANSWER C
________ economics prescribes what an individual or society ought to do. A) Normative B) Behavioral C) Positive D) Negative ANSWER A
Which of the following is NOT true according to Say’s law? A) Producing goods and services generates the means and the willingness to purchase other goods and services. B) Desired expenditures will always be higher than actual expenditures. C) Supply creates its own demand. D) No overproduction is possible in a market economy in the […]
Spending by businesses on things such as machines and buildings which can be used to produce goods and services in the future is A) investment. B) savings. C) consumption. D) consumption goods. ANSWER A
Saving is an example of A) a stock concept. B) a flow concept. C) a depreciation concept. D) an investment concept. ANSWER B
