(11) Apply the Rule of 70 to the following question. If you invest $10,000 at 5%
ID: 1140199 • Letter: #
Question
(11) Apply the Rule of 70 to the following question. If you invest $10,000 at 5% interest, how long will it take for your money to double? 5 years 7 years 10 years 14 years
(12) Study the graph below. A movement from point A to point B would most likely result in
sacrificing the production of capital goods for the production of consumption goods. an outward shift of the production possibilities frontier (PPF) curve. a lower level of full employment. higher prices.
(13) An outward shift of the long-run aggregate supply curve will raise an economy’s standard of living. increases unemployment. is caused by a depletion of natural resources. increases the aggregate price level.
(14) If an economy’s production possibilities frontier (PPF) curve shifts outward, we can expect the __________ to shift __________. aggregate demand curve; inward aggregate demand curve; outward long-run aggregate supply curve; outward long-run aggregate supply curve; inward
(15) All of the following would be considered capital goods, except a dump truck. a new factory. on-the-job training. All of the above are capital goods.
(16) What are the sources of savings in the economy? Business savings and household savings Private savings by households, government savings, and savings by foreigners The difference between income and spending of households The difference between income and spending of households and businesses
(17) How is the level of investment related to the level of savings in the economy? The higher the level of savings, the higher the level of investment. The lower the level of savings, the higher the level of investment. The relationship depends on how firms behave. Investment depends on interest rates, not savings.
(18) What is the effect on growth of eliminating trade barriers? Domestic producers are forced out of business, and growth slows. Domestic producers are forced to compete with importers, and productivity and growth increase. The domestic economy is unaffected. Consumers tend to substitute domestic goods for imports.
(19) What is the effect of banning imports in order to encourage the development of domestic industries? Exports increase. People pay more for goods and services, because they are produced by less efficient domestic manufacturers, who are protected from foreign competition. People pay less for goods and services, because they are produced domestically. The quality of goods and services improves, because they are produced domestically rather than imported from abroad.
(20) The cycle of poverty in which emerging countries are caught involves low productivity, which leads to high prices, low consumption, and poverty. low investment, which leads to low consumption, low prices, and low GDP. low per capita GDP, which leads to low demand, low savings, low investment, and low productivity. a low level of natural resources, which leads to low demand, low savings, low investment, and low productivity.
Explanation / Answer
Answer: (11) Rule of 70, n = 70/ 5 = 14 years, it means it will take 14 years to double the money. Option (d) is correct.
Answer (12) Movement from point A to point B would most likely result in sacrificing goods "C" for the production of Goods I.
Answer: (13) An outward shift of the long-run supply curve can occur as a result of an increase in an economy's resource base or an improvement in technology that makes production more efficient. Increasing long-run aggregate supply can only improve an economy's standard of living, because output is higher and prices are lower. Option (a)
Answer:( 14) If an economy’s production possibilities frontier (PPF) curve shifts outward, we can expect the long run aggregate supply cure shits outwards. As resources are increased so the production will increase too. Option (C) is correct.
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