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Unformatted text preview: ECONOMICS 116A EXAM ONE, FALL 2008 Show all calculations 1. (20 points) True or False. No explanation is required. a. A bond is an IOU promising its owner a set payment at a specified future date b. The net addition of new residential housing is counted in the household consumption category of GDP. c. The value of total inventories is counted as part of the investment component of GDP d. Every risk averse agent would decline all gambles with expected payout $0 e. Gross Domestic Product (GDP) includes intermediate goods and services to account for value added. f. The Consumer Price Index measures the cost of all final goods and services produced within a country. g. A pension indexed for inflation usually increases by an amount equal to the percentage increase in the CPI h. Debt financing refers to the corporate practice of selling shares of stock to raise money i. In a closed economy, private saving plus public saving equals investment j. Development of mortgaged backed securities increased risk spreading in financial markets k. Opportunity cost refers to the resources that must be sacrificed to gain more of another good or service...
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This note was uploaded on 10/21/2008 for the course ECON 116 taught by Professor Rayfair during the Fall '07 term at Yale.
- Fall '07