circular flow model (CFM) assumes that economic growth is "boundless. JD says that from the perspective of the CFM, the possibility that the economy ca indefinitely is O a. guaranteed O b. predicted O c. impossible O d. promised flowed
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- In a life-cycle model, a worker with constant household productivity will react to an expected decrease in wages by Select one: O A. increasing his labor supply. O B. decreasing his labor supply. O C. not changing his labor supply, since the wage increase was expected. OD. either increasing or decreasing his labor supply.Question 7 Which of the following would be counted in this year's GDP? O a O b O C Od Question & What is the difference between real GDP and nominal GDP? O a O b Column A 1. 2. C d Question 9 Match each phase of the business cycle to its correct definition. 3. The bonus check a worker receives this year the value of a loan taken out this year The value of a savings bond sold by the federal government to investors this year The value of a television produced last year but sold this year 4 Real GDP allows for depreciation; nominal GDP allows for no depreciation. Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities. Real GDP is based on constant prices; nominal GDP is based on the current year's prices. Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars. period of economic decline marked by falling real GDP a period of economic growth as measured by a rise in real GDP the height of an economic expansion, when real GDP…Question 32 If you are told that a country's nominal GDP decreased and its real GDP decreased over the same block of time, which of the following can you conclude with certainty? o The economy had inflation. O None of the choices listed is correct since none can be concluded with certainty. o The economy's price level remained constant. O The economy had disinflation o The economy had deflation. Question 33 Assume the economy of a trading partner enjoys a high rate of growth, interest rates in the economy decrease, and there is an improvement in productivity. Which of the following is correct? o The equilibrium price level will definitely decrease. O The equilibrium price level will definitely increase. o The equilibrium real GDP will definitely decrease. O The equilibrium real GDP will definitely increase.
- Suppose you read in the Wal Street Journal that, during the fourth quarter of 2020, the U.S. economy expanded at the fastest rate in two decades. It follows that one would expect in the unemployment rate and. in real GDP during the fourth quarter of 2020. O a. a decrease; a decrease O b. an'increase; an increase O c. a decrease; an increase O d. an increase; a decrease Next pageWhy is a Cobb-Douglas production function useful for analyzing economic growth? O A. The Cobb-Douglas production function provides an efficient way of measuring the correlation of total factor productivity and consumption per worker. O B. The Cobb-Douglas production function provides a good fit to show consumption per worker and how multiple variables affectit. OC. The Cobb-Douglas production function provides a good fit to aggregate data and is also a good analytical tool for growth accounting. OD. The Cobb-Douglas production function provides an efficient method of measuring output per worker in the long run.Refer to the figure at right, which shows the supply of national saving and investment demand as functions of the interest rate. Suppose the investment curve, I, shifts to the left. In the new equilibrium, the economy will have a O A. lower inflation rate. OB. higher rate of capital accumulation. OC. higher long-run rate of growth. O D. lower long-run rate of growth. Real Interest Rate NS Quantity of National Saving ($)
- What is the downside of using prizes to promote the creation of new technology? O It slows the spread and development of those ideas by restricting competition. Government money may be misdirected towards unproductive projects. O It prohibits competition forever. O Without a market test, prizes might be given to technology which ends up being useless. According to the Solow model, what portion of total savings in the economy goes towards investment? 50% 10% 90% O 100%An increase in the labor force: Consider a onetime change in governmentpolicy that immediately and permanently increases the level of the labor forcein an economy (such as a more generous immigration policy). In particular,suppose it rises permanently from L to Lr. Assuming the economy starts inits initial steady state, use the Solow model to explain what happens to the economy over time and in the long run. In particular, comment on what hap-pens to the level and growth rate of per capita GDP.Choose which statement is most correct. Nominal GDP must always equal potential GDP. O a. O b. Real GDP can never exceed potential GDP. O C. Nominal GDP can never exceed potential GDP. O d. Real GDP must always equal potential GDP. O e. At times, real GDP can exceed potential GDP.
- Among private consumption, private investment, government spending, and exports, which drives the business cycle? consumption O investment O government spending O exports Question 2 The main cause of boom-bust cycles has been O subsidies that generate higher land rent and land value, O too much spending on welfare. O government debt. too much financial activity. Question 3 A large expansion of money by the Federal Reserve O pushes down interest rates and creates excessive spending on real estate. O provides sustainable growth. O increases interest rates. O stabilizes the economy.Q2. d) Suppose the economy is initially in a steady state. What happens to the level of output per worker (y) and to the growth rate of aggregate capital ( K ) if the population growth (n ) decreases? Select one: O a. The level of output per worker decreases and the growth rate of aggregate capital decreases b. The level of output per worker decreases and the growth rate of aggregate capital increases O C. The level of output per worker increases and the growth rate of aggregate capital increases O d. The level of output per worker increases and the growth rate of aggregate capital decreasesctrl tab shift ↑ caps lock REAM Stream esc Question 3 K →1 Moving to another question will save this response. fn Which of these is among the principal determinants of economic growth? O the financial system stabilization policy the government budget deficit the central bank inflation A Moving to another question will save this response. O Type here to search ? (2 2 N W S f3 # 3 alt x f4 101 LA 4 Ai E R C % LL LO 5 T 6 G f7 hp & Y 7 H fg a V B N CO 19 8