ECON 20B Lecture Notes - Lecture 15: Stock Market, Bond Market, Financial Capital
Document Summary
Get access
Related Documents
Related Questions
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. |
1. Which of the following groups of countries are all advanced economies?
Ā | Ā |
Hong Kong, Japan, France, and the United Kingdom |
Ā | Ā |
Italy, the United States, China, and Russia |
Ā | Ā |
Singapore, Russia, France, and Chad |
Ā | Ā |
Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
Ā | Ā |
developing; emerging market |
Ā | Ā |
advanced; emerging market |
Ā | Ā |
emerging market; developing |
Ā | Ā |
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.
Ā | Ā |
goods; financial |
Ā | Ā |
government; goods |
Ā | Ā |
goods; factor |
Ā | Ā |
financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
Ā | Ā |
labor. |
Ā | Ā |
capital. |
Ā | Ā |
entrepreneurship. |
Ā | Ā |
land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Ā | Ā |
Households are; the government determines |
Ā | Ā |
Firms are; households that determine |
Ā | Ā |
The government is; firms determine |
Ā | Ā |
Households are; firms that determine |
QUESTION 6
1. The emerging market economies are
Ā | Ā |
the nations that are currently agricultural in nature. |
Ā | Ā |
most of the nations of Western Europe. |
Ā | Ā |
the largest grouping including the nations of China and India. |
Ā | Ā |
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
Ā | Ā |
consumption of goods and services. |
Ā | Ā |
entrepreneurship. |
Ā | Ā |
capital. |
Ā | Ā |
labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
Ā | Ā |
personal goods. |
Ā | Ā |
consumption of goods. |
Ā | Ā |
consumption or investment goods. |
Ā | Ā |
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
Ā | Ā |
virtually all; none |
Ā | Ā |
some; some |
Ā | Ā |
virtually all; virtually all |
Ā | Ā |
virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
Ā | Ā |
land. |
Ā | Ā |
labor. |
Ā | Ā |
entrepreneurship. |
Ā | Ā |
capital. |
QUESTION 11
1. What would be an example of government good?
Ā | Ā |
Donald Trump purchases furniture for his office. |
Ā | Ā |
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
Ā | Ā |
The local driver's license office purchases a new digital camera and printer. |
Ā | Ā |
Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
Ā | Ā |
2 trillion |
Ā | Ā |
680 million |
Ā | Ā |
6.8 billion |
Ā | Ā |
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
Ā | Ā |
U.S. exports of goods and services. |
Ā | Ā |
U.S. government goods and services. |
Ā | Ā |
foreign capital goods. |
Ā | Ā |
U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
Ā | Ā |
corporate income taxes. |
Ā | Ā |
excise taxes. |
Ā | Ā |
sales taxes. |
Ā | Ā |
social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
Ā | Ā |
capital goods. |
Ā | Ā |
government goods and services. |
Ā | Ā |
consumption of goods and services. |
Ā | Ā |
exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
Ā | Ā |
profit. |
Ā | Ā |
interest. |
Ā | Ā |
rent. |
Ā | Ā |
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
Ā | Ā |
must include a written contract between buyers and sellers. |
Ā | Ā |
requires a physical location for buyers and sellers to get together. |
Ā | Ā |
is only a place to purchase groceries. |
Ā | Ā |
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
Ā | Ā |
highly skilled and educated labor force. |
Ā | Ā |
a large number of kind and generous humans. |
Ā | Ā |
a large number of people and a great deal of land. |
Ā | Ā |
a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
Ā | Ā |
labor, machines, buildings, capital, and entrepreneurship |
Ā | Ā |
land, buildings, capital, and entrepreneurship |
Ā | Ā |
land, labor, capital, and entrepreneurship |
Ā | Ā |
forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
Ā | Ā |
capital, money, and labor |
Ā | Ā |
hardware, software, land, and money |
Ā | Ā |
land, labor, capital, and entrepreneurship |
Ā | Ā |
machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
Ā | Ā |
10 |
Ā | Ā |
3 |
Ā | Ā |
15 |
Ā | Ā |
20 |
QUESTION 22
1. What would be an example of a consumption service?
Ā | Ā |
Jake buys an iPhone. |
Ā | Ā |
The local driver's license office purchases a new digital camera and printer. |
Ā | Ā |
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
Ā | Ā |
Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
Ā | Ā |
$47 trillion. |
Ā | Ā |
$10 trillion. |
Ā | Ā |
$100 trillion. |
Ā | Ā |
$79 trillion. |
QUESTION 24
1. An export good is a good produced
Ā | Ā |
by foreigners in the United States and purchased by U.S. households. |
Ā | Ā |
in another country and purchased by U.S. residents. |
Ā | Ā |
in the United States and sold to foreigners living in the United States. |
Ā | Ā |
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.
Ā | Ā |
Interest is; wages are; profit is |
Ā | Ā |
Rent is; wages are; interest is |
Ā | Ā |
Rent is; interest is; wages are |
Ā | Ā |
Mortgages are; interest is; wages are |