The country of San Pedro produces two goods: beach towels and soccer balls. Last year, it produced 100 beach towels and 250 soccer balls. This year, it produced 125 beach towels and 300 soccer balls. Given no other information, which of the following could NOT explain the change?

a. San Pedro experienced a reduction in unemployment.

b. San Pedro experienced an improvement in widget-making technology.

c. San Pedro acquired more resources.

d. San Pedro experienced a high level of emigration out of the country.

In a closed economy, what is private saving?

a.the amount of income that households have left after paying for their taxes and consumption

b. the amount of income that businesses have left after paying for the factors of production

c. the amount of tax revenue that the government has left after paying for its spending

d. the amount of tax revenue that the government has left after paying for transfers

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). Suppose the value of the condominium owners' housing services is now the same as their former rent. What happens to GDP?

a. GDP necessarily increases.

b. GDP necessarily decreases.

c. GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.

d. GDP is unaffected because previously rent was included in GDP, and now it is replaced by the estimate of the value of housing services.

Retirement savings accounts, such as IRAs, help increase economic growth because

a. people have an incentive to work harder and longer hours to save for the future.

b. they keep the interest rates high.

c. savings finances investment.

d. government invests them.

e. they encourage international trade.