Question Details

Three quarters of all Americans worked on farms 




1. “India, however, is strong in ways that are not always apparent. Although its savings rate is lower than China-, it uses investment more efficiently to produce economic growth.” “Uses investment more efficiently” means that investment projects are chosen by 
a)	the government 
b)	the capital market 
c)	the central bank 
d)	foreigners 

2. “A key economic adviser to President George W. Bush said yesterday he believed that national saving was too low in the US. But he agreed that encouraging consumers to save at a time when their spending was largely responsible for keeping the US economic recovery on track could be risky. But in the longer term, he said, the rationale for increasing savings in the US was clear.” The logic behind this statement is that in the short run higher saving 
a)	decreases demand and so increases unemployment, but in the long term it increases the capital stock 
b)	increases demand and so decreases unemployment, but in the long term it increases the capital stock 
c)	decreases demand and so increases unemployment, but in the long term it decreases the capital stock 
d)	increases demand and so decreases unemployment, but in the long term it increases the capital stock 

3. "One way corporations justify growing debt is that it enables the expansion of markets and capital assets. But that isn't the case with the federal government. It produces nothing. Money tied up in the debt may go partially for necessities or entitlements that large segments of the population want to continue, but the debt itself is not an example of productive debt.” What is an example of government “productive debt”? Borrowing to 
a)	feed the poor 
b)	subsidize medical care 
c)	build roads 
d)	pay pensions 

4. “Identifying bubbles is a thorny problem. Sharp price rises that appear irrational might in fact turn out to be justified. Policy makers need to be careful of trusting their judgment over the collective judgment of the market because efforts to restrain prices could interfere with the crucial role markets play in ………” The best way to complete this statement is 
a)	determining unemployment 
b)	balancing the budget 
c)	controlling inflation 
d)	allocating capital 

5. “Three quarters of all Americans worked on farms in 1800. Only 40 per cent did in 1900. And in 2000 only 3 per cent. This change was the best thing that could have happened to Americans.” Explain why this change was so desirable. 
a)	the unemployment rate fell dramatically 
b)	inflation was prevented 
c)	the business cycle disappeared 
d)	creative destruction operated 




Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help