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8. To acquire human capital a person could: a. save to buy a printing press b. p

ID: 1251087 • Letter: 8

Question

8. To acquire human capital a person could:
a. save to buy a printing press
b. purchase a printing press rather than use his or her money on consumption
c. learn to use a printing press d. sell the books that the printing press produces e. buy the books that the printing press produces


9. Which of the following is considered to be part of the money supply? Circle all correct answers—there may be more than one.
a. currency
b. Treasury bills
c. diamonds
d. Coca-Cola stock
e. checking account deposits
f. 10% off coupons good at the bookstore

13. Which of the following transactions will be included in GDP in the United States (circle all correct answers; there may be more than one)

a. Coca-Cola builds a new bottling plant in the United States.
b. Delta Airlines sells one of its existing airplanes to Korean Air.
c. Ms. Moneybags buys an existing share of Disney stock.
d. A California winery produces a bottle of Chardonnay and sells it to a customer in Montreal, Canada.
e. An American buys a bottle of French perfume in Tulsa.
f. A book publisher produces too many copies of a new book; the books don’t sell this year, so the publisher adds the surplus books to inventories.


15. Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases due to increased optimism about future economic growth. As the economy moves to short-run macroeconomic equilibrium, there is:
a. a recessionary gap with high inflation
b. a recessionary gap with low unemployment
c. a recessionary gap with low inflation
d. an inflationary gap with high unemployment
e. an inflationary gap with low unemployment

20. A laptop computer purchased by a private individual is considered by economists to be:
a. consumption spending
b. investment spending
c. government spending on goods and services
d. a transfer payment
e. private saving
f. investment in human capital



Explanation / Answer

8. To acquire human capital a person could:
a. save to buy a printing press
b. purchase a printing press rather than use his or her money on consumption
c. learn to use a printing press human capital is learning/knowing how to do things - it's knowledge

d. sell the books that the printing press produces e. buy the books that the printing press produces


9. Which of the following is considered to be part of the money supply? Circle all correct answers—there may be more than one.
a. currency
b. Treasury bills
c. diamonds
d. Coca-Cola stock
e. checking account deposits
f. 10% off coupons good at the bookstore

13. Which of the following transactions will be included in GDP in the United States (circle all correct answers; there may be more than one)

a. Coca-Cola builds a new bottling plant in the United States.
b. Delta Airlines sells one of its existing airplanes to Korean Air.
c. Ms. Moneybags buys an existing share of Disney stock.
d. A California winery produces a bottle of Chardonnay and sells it to a customer in Montreal, Canada.
e. An American buys a bottle of French perfume in Tulsa.
f. A book publisher produces too many copies of a new book; the books don’t sell this year, so the publisher adds the surplus books to inventories.


15. Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases due to increased optimism about future economic growth. As the economy moves to short-run macroeconomic equilibrium, there is:
a. a recessionary gap with high inflation
b. a recessionary gap with low unemployment
c. a recessionary gap with low inflation
d. an inflationary gap with high unemployment
e. an inflationary gap with low unemployment

20. A laptop computer purchased by a private individual is considered by economists to be:
a. consumption spending - because it's purchased by a private individual
b. investment spending
c. government spending on goods and services
d. a transfer payment
e. private saving
f. investment in human capital

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