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During the late 1990s and early 2000s, the stock market and investment expenditure
were linked through:
A) the creation of over-the-counter stock markets, such as NASDAQ.
B) the management of monetary policy, that guaranteed low interest rates.
C) expectations, first optimistic and then pessimistic, about the economy.
D) the deregulation of financial intermediaries.
As capital deepening occurs, there will be
A) economic growth and decreases in depreciation.
B) increased real wages and economic growth.
C) decreased real wages and decreases in saving.
D) decreases in depreciation and decreases in saving.
If total output grows at 4 percent per year while labor and capital grow at 1.5 percent
and 2.1 percent pre year, respectively, then:
A) technology grew by 0.4 percent per year.
B) there was no technological progress.
C) technology declined by 0.4 percent per year.
D) technology grew by 3.6 percent per year.
Transfer payments are excluded from government purchases in GDP accounting
because
A) they are difficult to measure.
B) they are a reward to individuals who have been productive their entire lives.
C) they are already included as part of investment.
D) nothing is being produced in return for the payment.
Economists use different definitions of money because
A) there are differences in the frequency with which depositors use their accounts.
B) deposits can be domestic or international.
C) deposits may be held at banks or savings and loans.
D) it is not always clear which assets are used primarily as money.
The accelerator theory is a theory of investment that states that current investment
spending depends:
A) positively on the expected future growth of real GDP.
B) negatively on the expected future growth of real GDP.
C) positively on the investment levels last period.
D) positively on last years growth in real GDP.
Figure 9.2 Refer to Figure 9.2. Suppose the economy is at Point A, an increase in
money supply causes a movement to Point:
A) B.
B) D.
C) C.
D) E.
In the Solow Model, the long run equilibrium is at the point where:
A) GDP equals K.
B) investment equals population growth.
C) investment equals depreciation.
D) investment equals zero.
Which of the following is an investment (broadly defined)?
A) education
B) purchase of capital equipment
C) a purchase of ownership of a company
D) All of the above are investments.
The seven members of the board of governors are appointed to 14-year terms by:
A) the President of the United States.
B) by the Federal Reserve Chairman.
C) Congress.
D) the 12 district bank presidents.
