BUS 202 Test 3 Study Guide Compatibility Mode Abigail N Madden Mailings Review V

Question

BUS 202 Test 3 Study Guide Compatibility Mode Abigail N Madden Mailings Review View Help Tell me what yo Find Heading 1 vac Replace Normal No Spac.. H A·?·A- Select Paragraph Styles Edting 23. Economic growth occurs when a. investment occurs b. jobs are sent overseas c. women and minorities are kept out of the workplace d. undocumented immigrants are sent back to their home country e. none of the above 24. An economy that produces more capital goods will a. grow less b. grow more c remain the same d. hinder growth e. none of the above 25. The process that transforms resources into goods and services is called 7/ SUS 15 fo f9 f11 f12 sc rea

Explanation / Answer

Ans 23) a) investment occurs, the reason behind this is given below:

Investment influences the rate of economic growth because it is a component of aggregate demand (AD) and more importantly influences the productive capacity of the economy. (LRAS

Investment means expenditure on capital spending, e.g. buying new machines, building bigger factories, buying robots to enable automation. (in economics investment does not mean saving money in a bank)

Investment is a component of Aggregate Demand (AD). Therefore, if there is an increase in investment, it will help to boost AD and short-run economic growth.

If there is spare capacity, then increased investment and a rise in AD will increase the rate of economic growth.

Ans 24)b) grow more, the reason is given below :

Capital Investment, Capital Goods andEconomic Growth. Improved capital goods increase labor productivity. ... Superior capital equipment directly makes individuals, businesses and countries more productive and efficient. Increased efficiency leads to economic growth.

It adversely affects only in the short run. But,  it boosts the production of consumer goods in long run. So, overall investement in capital goods is beneficial.

Ans33) a) Production :Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals

Ans34) d) least costly this is because Education is free in Italy and free education is available to children of all nationalities who are residents in Italy. Italy has both a private and public education system.

Ans37) a) Technology :Technology for economic development of any country is an important factor. All developed and under developed countries economy, agriculture, industry, transport, banking, health, education and improved technology in all sectors are trying to install. ... With labor productivity growth in the use of technology.

Ans1) a) Aggregate supply refers to the relationship between price level and output that the firms are willing and able to offer for sale at a point of time, keeping other factors constant.

Ans2) e) All of the above

The short-run aggregate supply curve is affected by production costs including taxes, subsidies, price of labor (wages), and the price of raw materials. All of these factors will cause the short-run curve to shift. When there are changes in the quality and quantity of labor and capital the changes affect both the short-run and long-run supply curves. The long-run aggregate supply curve is affected by events that change the potential output of the economy.

Changes in short-run aggregate supply cause the price level of the good or service to drop while the real GDP increases. In the long-run the prices stabilize and the price level of the good or service increase in response to the changes.

Ans 3)b

Ans4) a

Reason behind both the answers are given below:

Real wages are the wages which take inflation rate into consideration. On the other hand, Nominal wages are simply the amount given as wages.

For eg. In an economy, inflation rate is 2% and your wages i.e Nominal Wages are $100. So although you are earning $100 but your real wage is $98.

A simple google search of “Real vs Nominal Wages” returns the following explanation:

While a nominal wage is the amount of money you earn per hour, it really doesn't tell you much about your purchasing power because nominal wages don't take into account changes in price levels. Your real wage is your nominal wage adjusted for inflation.

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