Question

Usually, when the supply of loanable funds increases, then interest rates:

Select one:

a. Remain unchanged.

b. Increase.

c. Might increase or decrease.

d. Decrease.

Outward oriented policies have adverse effect on economic growth.

Select one:

a. Fales.

b. True.

Human capital refers to society’s understanding of the best ways to produce goods and services.

Select one:

a. Fales.

b. True.

If country A produces 6,000 units of goods and services using 600 hours of labor, and country B produces 5,000 units of goods and services using 450 units of labor, then productivity is higher in Country B than in Country A.

Select one:

a. True.

b. Fales.

Question text

Productivity refers to the amount of goods and services produced in a certain country.

Select one:

a. Fales.

b. True.

Answer 1

Answer 1

Usually, when the supply of loanable funds increases, then interest rates:

d. Decrease.

Reason: When the supply of loanable funds increases, the demand is less than suppy. This means people do not want much loans as compared to what are available in the market. The interest rates, therefore, come down.

Answer 2

Outward oriented policies have adverse effect on economic growth.

a. False

Reason: Outward-oriented policies (e.g., the elimination of restrictions on trade or foreign investment) promote integration with the world economy. These policies have positive impact on economic growth.

Answer 3

Human capital refers to society’s understanding of the best ways to produce goods and services.

b. True.

Reason: Human Capital can be defined as the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Answer 4

If country A produces 6,000 units of goods and services using 600 hours of labor, and country B produces 5,000 units of goods and services using 450 units of labor, then productivity is higher in Country B than in Country A.

a. True.

Reason: We can measure labor productivity as: total output / total input. It is 11.11 for Country B and 10 for Country A. Thus, Labor productivity is higher for Country B.

Answer 5

Productivity refers to the amount of goods and services produced in a certain country.

a. False

Reason: Productivity does not mean the amount of goods produced. It is a ratio of output divided by input used.