4. The convergence hypothesis helps explainwhy ______. (Points: 1) highly educat

Question

4. The convergence hypothesis helps explainwhy ______. (Points: 1)
      highly educated people converge in high-incomecountries
       high-income individualsmarry other high-income individuals
       high-income countriescontinue their high growth rates
       high-income countries tendto have slower growth rates compared to lower-incomecountries


5. The budget balance is equal to _______.(Points: 1)
       taxes minus governmenttransfers minus government spending
       taxes minus governmentspending
       government spending minustaxes
       taxes plus governmentspending minus government transfers


6. If there is an increase in the governmentbudget deficit _______. (Points: 1)
       the demand for loanablefunds will increase, interest rates will increase, and the amountof borrowing will increase
       the demand for loanablefunds will decrease, interest rates will decrease, and the amountof borrowing will decrease
       the supply of loanablefunds will increase, interest rates will decrease, and the amountof borrowing will increase
       the supply of loanablefunds will decrease, interest rates will increase, and the amountof borrowing will decrease

Explanation / Answer

d. high -income countries tend to haveslower growth rates compared to lower-incomecountries. ( solow growth model suggests that high-income countries willhave slower growth rates)
5. the budget balance is equal to a. taxes minus government transfer minusgovernment spending ( government revenue= taxes; government expenses= governmenttransfer and goverment spending; and budget balance= governmentrevenue- government expenses)
6.if there is an increase in the government budgetdeficit d. the supply of loanable funds willincrease, interest rates will increase , and the amount ofborrowing will increase ( government deficit decreases thesupply of loanable funds assavers take their money out of commercial banks and invest in thebond market due to the attractive interest rateson government debt. Less funds available for the private sectordrives up interest rates)

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