1. Better ideas or technological knowledge causes: Select one: a. the investment

Question

1. Better ideas or technological knowledge causes:

Select one:

a. the investment function to shift downward.

b. the depreciation function to shift downward.

c. the production function to shift downward.

d. the production function to shift upward.

2. Which of the following institutions channels loanable funds from savers to borrowers?

Select one:

a. financial intermediaries

b. the Treasury Department

c. Congress

d. the Internal Revenue Service

3. The sustained growth that the U.S. has experienced over the past couple centuries is best explained by:

Select one:

a. the increase in our capital stock

b. the continuous discover of new ideas

c. the increase the human capital of our workers

d. the growth in our population

4. Which of the following would be the most likely to cause an increase in the demand for loanable funds?

Select one:

a. an increase in savings

b. a decrease in the interest rate

c. a decrease in consumption

d. an increase in government borrowing

5. Compared to workers in most of the world, U.S. workers have:

Select one:

a. an unlimited supply of physical capital.

b. roughly the same amount of physical capital.

c. a relatively large amount of physical capital.

d. a relatively small amount of physical capital

6. Which of the following would cause an increase in firms' willingness and ability to borrow money, i.e. shift the demand for loanable funds to the right?

Select one:

a. if the economy falls into recession

b. if the government increase business taxes

c. if firms lowered the profit expectations base on changes in household spending

d. if firms become more optimistic about business conditions

Explanation / Answer

Ans1) the correct option is d. the production function to shift upward.

Ans2) The correct option is a. financial intermediaries. Financial Intermediaries are the financial institutions through which savers can INDIRECTLY provide funds to borrowers.

Ans3) the correct option is c. the increase the human capital of our workers.

Ans4) the correct option is d. an increase in government borrowing

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