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MP3U Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ ____ ____ ____ ____ ____ 1. Over the

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MP3U Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Over the past century in the United States, real GDP per person has grown, on average, by about a. 1 percent per year. b. 2 percent per year. c. 3 percent per year. d. 5 percent per year. ____ 2. Which of the following would not be considered physical capital? a. a new factory building b. a computer used to help Mercury Delivery Service keep track of its orders c. on-the-job training d. a desk used in an accountant's office ____ 3. After adjusting for inflation, over time the prices of most natural resources have been a. steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. b. steady or falling, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. c. rising, meaning that our ability to conserve them is growing more rapidly than their sup- plies are dwindling. d. rising, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. ____ 4. The traditional view of the production process is that capital is subject to a. diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries. b. diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries. c. increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries. d. increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries. ____ 5. Once an idea enters society's pool of knowledge, the knowledge becomes a a. societal good. b. private good. c. public good. d. proprietary good. ____ 6. Institutions that help to match one person's saving with another person's investment are collectively called the a. Federal Reserve system. b. banking system. c. monetary system. d. financial system. ____ 7. The sale of stocks a. and bonds to raise money is called debt finance. b. and bonds to raise money is called equity finance. c. to raise money is called debt finance, while the sale of bonds to raise funds is called equity finance. d. to raise money is called equity finance, while the sale of bonds to raise funds is called debt
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finance. ____ 8. The Dow Jones Industrial Average is now based on the prices of the stocks of a. 30 major U.S. corporations. b. 100 major U.S. corporations. c. 500 representative U.S. corporations. d. 1,000 representative U.S. corporations. ____ 9. If the supply for loanable funds shifts to the left, then the equilibrium interest rate a. and quantity of loanable funds rise. b. and quantity of loanable funds fall. c. rises and the quantity of loanable funds falls. d. falls and the quantity of loanable funds rises. ____ 10. Which of the following would necessarily create a surplus at the original equilibrium interest rate in the loanable funds market? a. an increase in the supply of or a decrease in the demand for loanable funds b. an increase in the supply of or an increase in the demand for loanable funds c. a decrease in the supply of or a decrease in the demand for loanable funds d. a decrease in the supply of or an increase in the demand for loanable funds ____ 11. If the inflation rate is 2 percent and the real interest rate is 3 percent, then the nominal interest rate is a. 5 percent. b. 1 percent. c. 1.5 percent d. 0.67 percent. ____ 12. Which of the following are effects of an increased budget deficit? a. the supply of loanable funds does not change; a higher interest rate reduces private saving b. the supply of loanable funds does not change; a higher interest rate raises private saving c. at any interest rate the supply of loanable funds is less; a higher interest rate reduces private saving d. at any interest rate the supply of loanable funds is less; a higher interest rate raises private saving Figure 26-1. The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. S1 Demand S2 ____ 13. Refer to Figure 26-1. Which of the following events would shift the supply curve from S1 to S2? a. In response to tax reform, firms are encouraged to invest more than they previously inves-
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