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MACROECONOMICS: The Real Economy in the Long Run

Terms in this set (34)

Other things the same, when an economy increases its saving rate
consumption falls now and production rises later.
Which of the following statements is not correct?
Malthus argued that charity and government aid was an effective way to reduce poverty.
Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably
raise real GDP per person and productivity in Eurnesia.
In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?
1/3 laptop per hour
You and your friend work together for 4 hours to produce a total of 12 futons. What is productivity?
1.5 futons per hour of labor
Interest rates fall and investment falls. Which of the following could explain these changes?
The government repeals an investment tax credit.
Scenario 26-1. Assume the following information for an imaginary, closed economy.

GDP = $120,000; consumption = $70,000; private saving = $9,000; national
saving = $12,000.



Refer to Scenario 26-1. For this economy, government purchases amount to
$38,000.
As an alternative to selling shares of stock as a means of raising funds, a large company could, instead,
sell bonds.
In a closed economy, national saving equals
Select one:
a. investment.
b. income minus the sum of consumption and government purchases.
c. private saving plus public saving.
d. All of the above are correct.
all of the above
In a closed economy, national saving is
equal to investment
If an American-based firm opens and operates a new watch factory in Panama, then it is engaging in
foreign direct investment
A nation's standard of living is best measured by its
real GDP per person.
Rapid population growth
may depress economic prosperity by reducing the amount of capital which each worker has to work with
In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a
public good
In the long run, a higher saving rate
increases the level of productivity.
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