Macroeconomics-Ch.9&10

What does economic growth measure?

• Increase in population

• Increase in real GDP

• Increase in nominal GDP

• Decrease in inflation

What formula calculates the economic growth rate?

• Previous GDP /Current GDP × 100%

• (Current GDP - Previous GDP)/Previous GDP × 100%

• Current GDP − Previous GDP

• Current GDP × 100%

Which of the following best describes the Rule of 70?

• It calculates the time for a variable to increase by 70%.

• It calculates how fast population grows.

• It estimates the time it takes for a variable to double based on its growth rate.

• It estimates the real GDP growth rate.

What is labor productivity?

• Total hours worked

• Real GDP per person

• Real GDP produced per hour of labor

• Total capital used in production

According to the new growth theory, economic growth is driven by:

• Limited resources

• Population increase

• Human choices and innovation

• Government intervention

Which of the following describes net investment?

• Gross investment plus depreciation

• Gross investment minus depreciation

• Saving minus consumption

• Total government investment

What role does a bond play in financial markets?

• It provides ownership in a company.

• It represents a promise to pay specific amounts at set times.

• It serves as government revenue.

• It allows for unlimited liability.

When a government has a budget surplus, what happens to the loanable funds market?

• Demand for loanable funds decreases.

• Supply of loanable funds decreases.

• Supply of loanable funds increases, potentially lowering interest rates.

• Investment decreases due to higher interest rates.

A government budget deficit generally:

• Increases the supply of loanable funds.

• Decreases the supply of loanable funds.

• Increases the demand for loanable funds, potentially raising interest rates.

• Decreases the demand for loanable funds.

What happens to interest rates when the price of a financial asset rises?

• Interest rates fall.

• Interest rates rise.

• Interest rates remain the same.

• Interest rates become zero.