In the GDP model, investment (I) could be considered all of the following EXCEPT

ECON102 Macroeconomics

Unit 3 Challenge 3

In the GDP model, investment (I) could be considered all of the following EXCEPT __________.

a.)the building of a new factory

b.)the purchase of a stock

c.)the purchase of a new restaurant

d.)the increase in capital resources

Which of the following is an example of expansionary policy?

a.)Decreasing the salaries of government workers

b.)Government cuts in spending

c.)Decrease in investment

d.)Decrease in taxes

The Phillips Curve shows the trade-off between __________.

a.)price level and GDP

b.)inflation and unemployment

c.)tax rates and government revenue

d.)labor and leisure

Government securities that are issued for a time period between one and 10 years are known as __________.

a.)commodity money

b.)notes

c.)bills

d.)bonds

Economic growth is measured by the __________.

a.)percent increase in nominal GDP over time

b.)GDP, adjusted for inflation over time

c.)growth in the skilled labor force

d.)changes in the unemployment rate over time

Higher interest rates will __________.

a.)increase investment in the stock market

b.)decrease the cost of borrowing money

c.)slow down government spending

d.)decrease the consumption in the economy

Large budget deficits can have a ______ effect on economic growth because they can cause interest rates to _______.

a.)positive; fall

b.)positive; rise

c.)negative; fall

d.)negative; rise

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