Question
Question 1. Any economy is in long-run economic growth equilibrium. The population grows by 1% annually, the level of technology (E) advances by 1% annually,
Question 1.
Any economy is in long-run economic growth equilibrium. The population grows by 1% annually, the level of technology (E) advances by 1% annually, depreciation is 5% and the capital stock is twice the gross domestic product (GDP).
What is the ratio of investment to GDP?
a.9% b.20% c.12% d.14%
Question 2.
The following national accounts are available for the economy:
GDP has a market value of 500 Depreciation of fixed assets 70 Salary payments 315 Net transfers from abroad -20 Indirect grants 20 Net participation income from abroad 10 Indirect taxes 70
What is the share of wages in gross domestic product at factor value (also called income value or "basic price")?
a.84% b.86% c.70% d.98% e. 90% f. 88%
Question 3.
A certain consumer lives for two periods and is a net borrower in the first period.
How does consumption change in the previous period (C1) if the real interest rate falls?
a. Both the performance effect and the income effect are negative and C1 decreases
b. Both the performance effect and the income effect are positive and C1 increases
c.The efficiency effect is negative, but the income effect is positive, so the effect on C1 is unclear
d. The efficiency effect is positive, but the income effect is negative, so the effect on C1 is unclear
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started