Questions from General Economics

Q: What has been the approximate long-run growth rate of real

What has been the approximate long-run growth rate of real GDP per person in the United States? Name a country that has had faster growth and a country that has had slower growth.

Q: Suppose GDP is $8 trillion, taxes are $1.

Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed, calculate consumption, government purchases,...

Q: Economists in Funlandia, a closed economy, have collected the following

Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y =10,000 C =6,000 T =1,500 G =1,700 The economists also estimate that the...

Q: Suppose that Intel is considering building a new chipmaking factory.

Suppose that Intel is considering building a new chipmaking factory. a. Assuming that Intel needs to borrow money in the bond market, why would an increase in interest rates affect Intel’s decision ab...

Q: Three students have each saved $1,000. Each has

Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students’ investment projects: Harry …………….5 ...

Q: Suppose the government borrows $20 billion more next year than this

Suppose the government borrows $20 billion more next year than this year. a. Use a supply-and-demand diagram to analyze this policy. Does the interest rate rise or fall? b. What happens to investment?...

Q: This chapter explains that investment can be increased both by reducing taxes

This chapter explains that investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit. a. Why is it difficult to implement both of these policie...

Q: For each of the following pairs, which bond would you expect

For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain. a. a bond of the U.S. government or a bond of an Eastern European government b. a bond that repays...

Q: Many workers hold large amounts of stock issued by the firms at

Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person not want to hold stock in the company where he...

Q: Explain the difference between saving and investment as defined by a macroeconomist

Explain the difference between saving and investment as defined by a macroeconomist. Which of the following situations represent investment? Saving? Explain. a. Your family takes out a mortgage and bu...