If the marginal propensity to consume is 0.8, the marginal propensity to save is:
A. 0.4.
- 0.8
- 0.3.
- 1.2.
E .0.2.
The following table shows the rate of growth of five nations and the number of years required to double its output at various growth rates. B is expected to double its output in _____ years.
Table 12.1:
- 15
- 14
- 7
- 10
- 5
The net national product (NNP) is the:
- difference between
gross domestic product and net income of foreigners. - difference between gross domestic product and
depreciation. - difference between gross national product and depreciation
- sum of gross domestic product and depreciation
- sum of gross domestic product indirect business taxes
Poor infrastructure is a major deterrent to
True
False
Which of the following is a problem with using real gross domestic product (GDP) as a measure of economic well-being?
- It does not account for inflation
- It does not account for production by foreign firms producing inside the domestic economy
- It does not account for the value of services produced in the economy
- It does not account for changes in
purchasing power parity. - It does not account for production within the household
An excess of government revenues over expenditures results in a budget deficit
True
False
Allowing free trade can lead to greater output because of:
- diseconomies of scale.
- the rule of law
- the principle of
comparative advantage - the Rule of 70
- the principle of
absolute advantage .
A regressive tax
- imposes a greater burden on those with higher incomes than on those with lower incomes
- is based on the ability to pay principle
- takes a greater percentage of the income of lower-income groups than of higher-income groups.
- is based on the benefits received principle.
- is considered to be the most equitable type of tax
Fiscal policy is a plan for taxing and spending that is designed to steer an economy in a desired direction
True
False
Suppose in 2009, the United States imported $1.5 billion worth of goods and services and sold $4 billion worth of goods and services outside its borders. Therefore, in 2009 net exports were:
- $5.5 billion
B. −$4.4 billion
- $4.4 billion
- −$2.5 billion
- $2.5 billion
_____ shows roughly how long it will take a nation to double its output at various growth rates.
- The GDP deflator
- The rules of the game
- The
production possibilities curve - A per-worker production function
- The Rule of 70
Capital formation is a key component of economic growth.
True
False
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