ECON 1010 Chapter Notes - Chapter 23: Loanable Funds, Real Interest Rate, Nominal Interest Rate
Document Summary
Get access
Related Documents
Related Questions
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
||
Italy, the United States, China, and Russia |
||
Singapore, Russia, France, and Chad |
||
Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
||
advanced; emerging market |
||
emerging market; developing |
||
advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
||
government; goods |
||
goods; factor |
||
financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
||
capital. |
||
entrepreneurship. |
||
land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
||
Firms are; households that determine |
||
The government is; firms determine |
||
Households are; firms that determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
||
most of the nations of Western Europe. |
||
the largest grouping including the nations of China and India. |
||
in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
||
entrepreneurship. |
||
capital. |
||
labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
||
consumption of goods. |
||
consumption or investment goods. |
||
standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
||
some; some |
||
virtually all; virtually all |
||
virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
||
labor. |
||
entrepreneurship. |
||
capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
||
680 million |
||
6.8 billion |
||
6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
||
U.S. government goods and services. |
||
foreign capital goods. |
||
U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
||
excise taxes. |
||
sales taxes. |
||
social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
||
government goods and services. |
||
consumption of goods and services. |
||
exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
||
interest. |
||
rent. |
||
wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
||
requires a physical location for buyers and sellers to get together. |
||
is only a place to purchase groceries. |
||
is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
||
a large number of kind and generous humans. |
||
a large number of people and a great deal of land. |
||
a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
||
land, buildings, capital, and entrepreneurship |
||
land, labor, capital, and entrepreneurship |
||
forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
||
hardware, software, land, and money |
||
land, labor, capital, and entrepreneurship |
||
machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
||
3 |
||
15 |
||
20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
||
$10 trillion. |
||
$100 trillion. |
||
$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
||
in another country and purchased by U.S. residents. |
||
in the United States and sold to foreigners living in the United States. |
||
in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
||
Rent is; wages are; interest is |
||
Rent is; interest is; wages are |
||
Mortgages are; interest is; wages are |
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
||
Italy, the United States, China, and Russia |
||
Singapore, Russia, France, and Chad |
||
Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
||
advanced; emerging market |
||
emerging market; developing |
||
advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
||
government; goods |
||
goods; factor |
||
financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
||
capital. |
||
entrepreneurship. |
||
land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
||
Firms are; households determine |
||
The government is; firms determine |
||
Households are; firms determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
||
most of the nations of Western Europe. |
||
the largest grouping including the nations of China and India. |
||
in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
||
entrepreneurship. |
||
capital. |
||
labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
||
consumption of goods. |
||
consumption or investment goods. |
||
standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
||
some; some |
||
virtually all; virtually all |
||
virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
||
labor. |
||
entrepreneurship. |
||
capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
||
680 million |
||
6.8 billion |
||
6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
||
U.S. government goods and services. |
||
foreign capital goods. |
||
U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
||
excise taxes. |
||
sales taxes. |
||
social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
||
government goods and services. |
||
consumption of goods and services. |
||
exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
||
interest. |
||
rent. |
||
wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
||
requires a physical location for buyers and sellers to get together. |
||
is only a place to purchase groceries. |
||
is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
||
a large number of kind and generous humans. |
||
a large number of people and a great deal of land. |
||
a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
||
land, buildings, capital, and entrepreneurship |
||
land, labor, capital, and entrepreneurship |
||
forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
||
hardware, software, land, and money |
||
land, labor, capital, and entrepreneurship |
||
machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
||
3 |
||
15 |
||
20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
||
$10 trillion. |
||
$100 trillion. |
||
$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
||
in another country and purchased by U.S. residents. |
||
in the United States and sold to foreigners living in the United States. |
||
in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
||
Rent is; wages are; interest is |
||
Rent is; interest is; wages are |
||
Mortgages are; interest is; wages are |
Question 3
According to Joseph Schumpeter, the theory of creative destruction describes a process by which
A | some new products unleash a gale of destruction that drive other new products out of the market. | |
B | new products unleash a gale of destruction that drives old products out of the market. | |
C | new products are created by the destruction of capital. | |
D | the creation of new products never involves the destruction of old products. |
Question 4
Which of the following countries had the highest GDP per capita in 2012?
A Qatar | ||
B | United States | |
C | Japan | |
D | Norway |
Question 5
________ save a ________ of their income. This ________ capital in their economy and raises economic growth.
A | Developing countries; large proportion; decreases | |
B | Developing countries; small proportion; increases | |
C | High-income countries; large proportion; increases | |
D | High-income countries; small proportion; increases |
Question 6
The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.
A
A | government | |
B | households | |
C | banks | |
D | firms |
Question 7
The U.S. economy has been more stable since 1950.
True
False
Question 8
When the economy reaches a trough in a business cycle, which of the following will occur?
A | Income, production, and employment will continue to fall. | |
B | Income, production, and employment will begin to rise. | |
C | Income and production will rise, but employment will continue to fall. | |
D | Employment rises, but income and production will continue to fall. |
Question 9
In a closed economy, what is the relationship between saving and investment?
A | Saving is greater than investment. | |
B | Investment is greater than saving. | |
C | Investment is equal to saving. | |
D | Investment may be greater or smaller than saving. |
Question 10
The per-worker production function shows the relationship between ________ per hour worked and ________ per hour worked, holding ________ constant.
A | labor; real GDP; technology | |
B | capital; real GDP; technology | |
C | labor; capital; real GDP | |
D | capital; labor; real GDP |
Question 11
New growth theory states that increases in ________ capital will result in ________ at the ________ level.
A | knowledge; increasing returns to scale; firm | |
B | physical; decreasing returns to scale; firm | |
C | knowledge; decreasing returns to scale; economy | |
D | knowledge; increasing returns to scale; economy |
Question 12
Which of the following is not a reason why the Industrial Revolution occurred when and where it did?
A | The British government was committed to upholding private property rights. | |
B | The British government was able to eliminate arbitrary increases in taxes. | |
C | The British government was able to more easily seize wealth. | |
D | Institutional changes by the British government helped protect wealth. |
Question 13
Growth in real GDP per capita for the world economy was greatest during
A | the seventeenth century. | |
B | the eighteenth century. | |
C | the nineteenth century. | |
D | the twentieth century. |
Question 14
Which of the following is a normative statement about economic growth?
A | Economic growth is associated with higher labor productivity growth. | |
B | Economic growth increases GDP per capita. | |
C | Economic growth hurts developing countries. | |
D | Foreign direct investment stimulates economic growth. |
Question 15
The effect of a recession on a company like Whirlpool Corporation is such that
A | sales decline more sharply for Whirlpool as compared to firms that do not produce durable goods. | |
B | profits fall less sharply as compared to firms that do not produce durable goods. | |
C | the decline in sales is more short-lived as compared to firms that do not produce durable goods. | |
D | there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods. |
Question 16
For the recessions in the United States since the 1950s,
A | cyclical unemployment has been non-existent. | |
B | unemployment rises on average by about 1.2 percentage points 12 months after a recession begins. | |
C | unemployment falls on average by 2 percentage points 12 months after a recession begins. | |
D | unemployment rises on average about 5 percentage points 12 months after a recession begins. |
Question 17
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A | a reduction in sales taxes | |
B | an investment tax credit | |
C | a reduction in taxes on luxury yachts | |
D | All of these |
Question 18
In comparison to a government that runs a balanced budget, when the government runs a budget deficit,
A | the equilibrium interest rate will fall. | |
B | business investment will fall. | |
C | household savings will fall. | |
D | None of these |
Question 19
If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.
A | labor force participation | |
B | the quantity of goods or services that can be produced by one hour of work | |
C | the working-age population | |
D | nominal GDP |
Question 20
Policies to promote growth by increasing saving and investment work through
A | decreasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital. | |
B | increasing the supply of loanable funds, increasing the interest rate, raising the level of investment in physical capital. | |
C | increasing the supply of loanable funds, lowering the interest rate, lowering the level of investment in physical capital. | |
D | increasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital. |