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Seminar 3: Question

1. The document contains a seminar with three types of questions about macroeconomics: true/false questions with explanations, discussion questions, and multiple choice questions. 2. Some of the topics covered include productivity, economic growth, standards of living, investment, savings, bonds, stocks, and government spending. 3. Questions assess understanding of concepts like how productivity relates to standards of living, differences between bonds and stocks, and how changes in government spending impact interest rates and investment.

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Hong Nguyen
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171 views9 pages

Seminar 3: Question

1. The document contains a seminar with three types of questions about macroeconomics: true/false questions with explanations, discussion questions, and multiple choice questions. 2. Some of the topics covered include productivity, economic growth, standards of living, investment, savings, bonds, stocks, and government spending. 3. Questions assess understanding of concepts like how productivity relates to standards of living, differences between bonds and stocks, and how changes in government spending impact interest rates and investment.

Uploaded by

Hong Nguyen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Seminar 3: Question

By Dr. Le Thanh Ha
Type I: True/False question (give a brief explanation)
1. If a country has a higher level of productivity than another, then it also has a higher level
of real GDP.
2. Indonesians, for example, have a lower standard of living than Americans because they
have a lower level of productivity.
3. It is possible for a country without a lot of domestic natural resources to have a high
standard of living.
4. An increase in the saving rate does not permanently increase the growth rate of real GDP
per person.
5. When economists refer to investment, they mean the purchasing of stocks and bonds and
other types of saving.
6. When a firm wants to borrow directly from the public to finance the purchase of new
equipment, it does so by selling shares of stock.
7. Other things the same, corporate bonds generally feature higher interest rates than
government bonds.
8. When a corporation experiences financial problems, bondholders are paid before
stockholders.
9. Ha uses some of her income to buy mutual fund shares. A macroeconomist refers to Ha's
purchase as investment.
10. A decrease in taxes on interest income would increase the interest rate.
11. When the government budget deficit rises, national saving is reduced, interest rates rise,
and investment falls.
12. The term loanable funds refers to all income that is not used for consumption or
government expenditures. It is the flow of resources available to fund private
investment.

13. An increase in the budget deficit shifts the demand for loanable funds to the right.
Type II: Discussion questions
1.Why is productivity related to the standard of living? In your answer be sure to explain
what productivity and standard of living mean. Make a list of things that determine labor
productivity.
2. The catch-up effect says that countries with low income can grow faster than countries
with higher income. However, in statistical studies that include many diverse countries we
do not observe the catch-up-effect unless we control for other variables that affect
productivity. Considering the determinants of productivity, list and explain some things that
would tend to prohibit or limit a poor country's ability to catch up with the rich ones.
3. Some data that at first might seem puzzling: The share of GDP devoted to investment
was similar for the United States and South Korea from 1960-1991. However, during these
same years South Korea had a 6 percent growth rate of average annual income per person,
while the United States had only a 2 percent growth rate. If the saving rates were the same,
why were the growth rates so different?
4. What are the basic differences between bonds and stocks?
5. Which of the two bonds in each example would you expect to generally pay the higher
interest rate? Explain why.
a. a U.S. government bond or a Brazilian government bond
b. a U.S. government bond or a municipal bond with the same term and issued by a
creditworthy municipality.
c. a 6-month Treasury bill or a 20-year Treasury bond
d. a Microsoft bond or a bond issued by a new recording company
6. Identify each of the following acts as representing either saving or investment.
a. Fred uses some of his income to buy government bonds.
b. Julie takes some of her income and buys mutual funds.
c. Alex purchases a new truck for his delivery business using borrowed funds.
d. Elaine uses some of her income to buy stock in a major corporation.
e. Henrietta hires a builder to construct a new building for her bicycle shop.
7. Using a graph representing the market for loanable funds, show and explain what
happens to interest rates and investment if the government budget goes from a deficit to a
surplus.

Type III: Multiple Choice


1. Which of the following statements is correct?
a. The level of real GDP is a good gauge of economic prosperity, and the growth of
real GDP is a good gauge of economic progress.
b. The level of real GDP is a good gauge of economic progress, and the growth of
real GDP is a good gauge of economic prosperity.
c. The level of real GDP is a good gauge of economic prosperity, and the level of
real GDP per person is a good gauge of economic progress.
d. The level of real GDP is a good gauge of economic progress, and the level of real
GDP per person is a good gauge of economic prosperity.
2. Which of the following countries had the highest growth rate over the last 100 or so
years?
a. Brazil
b. Germany
c. Canada
d. United States
3. Which of the following does the level of real GDP measure?
a. total real income
b. productivity
c. the standard of living
d. All of the above are correct.
4. In determining living standards, productivity plays a key role
a. for individuals, but not for nations.
b. for nations, but not for individuals.
c. for both nations and individuals.
d. for neither nations nor individuals.
5. The quantity of goods and services produced from each unit of labor input is called
a. standard of living.
b. productivity.
c. capitalized quantity.
d. the knowledge base.
6. When a large, well-known corporation wishes to borrow directly from the public, it can
a. sell bonds.
b. sell shares of stock.
c. go to a bank for a loan.
d. All of the above are correct.
7. Which of the following statements is correct?
a. The expected future profitability of a corporation influences the demand for that
corporation’s stock.
b. When a corporation sells stock as a means of raising funds it is engaging in debt
finance.
c. The owners of bonds sold by the Microsoft Corporation are part owners of that
corporation.
d. All bonds are, by definition, perpetuities.
8. The economy’s two most important financial markets are
a. the investment market and the saving market.
b. the bond market and the stock market.
c. banks and the stock market.
d. financial markets and financial institutions.
9. Two of the economy’s most important financial intermediaries are
a. suppliers of funds and demanders of funds.
b. banks and the bond market.
c. the stock market and the bond market.
d. banks and mutual funds.
10. You observe a closed economy that has a government deficit and positive investment.
Which of the following is correct?
a. Private and public saving are both positive.
b. Private saving is positive; public saving is negative.
c. Private saving is negative; public saving is positive.
d. Both private saving and public saving are negative.
11. According to the definitions of private and public saving, if Y, C, and G remained the
same, an increase in taxes would
a. raise both private and public saving.
b. raise private saving and lower public saving.
c. lower private saving and raise public saving.
d. lower private and public saving.

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