Exam (elaborations)
MAC2 Exam Questions And Answers Graded A+
- Course
- Institution
MAC2 Exam Questions And Answers Graded A+...
[Show more]
Content preview
MAC2 Exam Questions And Answers Graded A+The level of a nation's GDP measures __________ - Answer economic prosperity
The growth rate of GDP measures - Answer economic progress
How higher saving leads to a higher standard of living - Answer Higher saving -->
physical capital increases --> more investment --> profit --> higher standard of living
What deter a policymaker from trying to raise the rate of saving? - Answer Future is
unpredictable
People cannot enjoy investing in future consumption
Why would the removal of a trade restriction tend to result in faster economic growth -
Answer Because trade has similar effects as discovering new technology, which
improves productivity and living standard
Population growth rate - GDP per capita: how does it affect it? 1) Answer Over-stretching
natural resources: 200 years ago, Malthus explained that population growth burdens
society's ability to provide for itself. Since then, the world population has grown sixfold,
but living standards have increased --> Malthus has failed to consider technological
progress and productivity growth.
Rate of population growth determines the level of GDP per capita-how? 2-Answer Diluting
the capital stock: Bigger population=higher L=lower K/L=lower productivity & living
standards. Applies to K and H. Fast population growth=more children=greater stress on
educational system. Countries with fast growth tend to have lower educational
attainment. But large populations have reasons to battle this as well: many countries use
policy to control population growth - China's one child per family law
Rate of population growth influences the level of GDP per person - how? 3 - Answer
, Promoting technical progress: More people = more scientists, engineers = more frequent
discoveries = faster technical progress and economic growth
diminishing returns the property whereby the benefit from an extra unit of an input
declines as the quantity of the input increase catch-up effect the property whereby
countries that start off poor tend to grow more rapidly than countries that start off rich
financial system a group of institutions in the economy that help to match one person's
saving with another person's investment
financial markets - Answer financial institutions through which savers can directly
provide funds to borrowers
bond - Answer a certificate of indebtedness
stock - Answer a claim to partial ownership in a firm
financial intermediaries - Answer financial institutions through which savers can
indirectly provide funds to borrowers
mutual fund - Answer an institution that sells shares to the public and uses the proceeds
to buy a portfolio of stocks and bonds
national saving-the sum of income in the economy that is left over after the economy
pays for consumption and government purchases
private saving-the income a household has left after paying for taxes and consumption
public saving-the revenue the government has left after it pays its spending
budget surplus-an excess of tax revenue over government spending
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Easton. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
73314 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now