(1) If the interest rate is 7% a year, how long would it take to double your inv
ID: 1140198 • Letter: #
Question
(1) If the interest rate is 7% a year, how long would it take to double your investment? 10 years 15 years 18 years 24 years
(2) Productivity is defined as the amount of output produced given a set of prices. a specific level of inputs. a production possibilities frontier. workers' willingness to work.
(3) What is the effect of an increase in the quantity of natural resources on productivity? Productivity rises. Productivity falls. Productivity remains unchanged, because it depends only on labor. Productivity remains unchanged, because it depends only on labor and capital accumulation.
(4) If returns to scale are constant, by how much does output rise if capital, labor, natural resources, and human capital each increase 8 percent? 2 percent 4 percent 8 percent 32 percent
(5) Given a fixed quantity of resources and technology, which of the following statements is true? There is a trade-off between the quantity of capital goods and the quantity of consumption goods that can be produced. An economy can produce more capital goods and more consumption goods if it increases the quantity of capital goods produced. Choosing a point inside the production possibilities frontier allows the economy to produce more consumption goods and more capital goods. Choosing a point outside the production possibilities frontier allows the economy to produce more consumption goods and more capital goods.
(6) What are the determinants of aggregate output? Labor, capital goods, natural resources, and human capital Prices, supply, and demand Inflation, unemployment, and growth Capital goods and consumption goods
(7) Which of the following is not likely to help an economy grow? An increase in population An increase in the level of education An increase in the price level An increase in the availability of natural resources
(8) Which of the following statements about an outward shift of the production possibilities frontier is true? The economy can no longer produce the same quantities of consumption and capital goods it did before the shift. The economy can produce more capital goods but fewer consumption goods. The economy faces a broader set of optimal production combinations. The aggregate supply curve shifts upward, meaning that at every price, producers are willing to supply less than they were before the shift.
(9) The term compounding refers to the increase in the growth rate over a period of time. the inflation adjustment to the growth rate of real GDP over a period of time. the accumulation of a growth rate over a period of time. none of the above.
(10) If Tom received a yearly raise of 7%, about how many years would it take for his salary to double? 7 years 10 years 14 years 21 years
Explanation / Answer
1. Option 1
The formula = 72/7 = 10.29 years
2. Option 2. It is the output obtained for a given level of inputs
3. Option 3. With the increase in natural resources the availability of inputs increases which increases the productivity
4. Option 3
5. Option 2. With use of capital goods the productivity increases which shifts the PPF curve outside
6. Option 1.
7. Option 3. Inflation reduces the value of real output
8. Option 3. It can produce more of goods with available technology
9. Option 3.
10. Option 2. No of years =72/7 = 10.29 years
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