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True or False
1) Physical capital, denoted by K, does not affect Gross Domestic Product in the long-run.
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- The saving rate (gross domestic saving as a % of GDP) in Australia, a small open economy, was 15% in 2011 while the investment rate (domestic investment as a % of GDP) was 25%. As a result, there was net outflow of capital from Australia in 2011. Is this true, false or uncertain? Please provide your explaination.Calculate the value of an economy's rate of depreciation, if its saving rate is 9%, total capital stock is 1500 units, its labour force includes 100 workers and total output is 500.True/False An increase in savings implies a decrease in consumption and therefore a decrease in GDP.
- True or False... When savings equals investment, reducing savings and increasing consumption is especially effective in stimulating output.Hb is 0 here as B specializes in home production and tb= 1, while ha 1 and ta=0Solow economy where TFP = 1, capital starts off at K0=1, the savings rate is 50%, and the annual depreciation rate of capital is 10%. What is the steady-state capital stock?
- True or false. As a capitalist economy, the vast majority of U.S. national income flows to the owners of capital.Discuss the shortcomings of Gross National Product as an indicator of financial well-beingBetween Foreign Direct Investment (net inflows %) and Real GDP Growth ( %): A. Identify the independent and dependent variable and explain Between Foreign Direct investment (net inflows %) and Real GDP per capita (constant %) a. Identify the independent and dependent variable and explain
- The financial markets play an important role in channeling funds from savers to borrowers. Which of the following illustartes this function of financial market? A) Investors purchase assets like real estate and gold from other investors B) Investors purchase securities that are issued by firms and government C) Investors deposit funds into interest bearing accounts which are then loaned to borrowers D) Investors purchase capital goods which are used in production by borrowersWhat is GNP? GNP is the market value of all the final goods and services _____. A. produced within a country minus depreciation B. produced within a country C. produced anywhere in the world by the factors of production supplied by the residents of that country D. produced anywhere in the world by the factors of production supplied by the residents of that country minus exportsRequires: In your OWN WORDS, discuss the following terminologies & concepts: Payback Period Accounting Rate of Return Net Present Value Internal Rate of Return Economic Growth and Economic Development GNP/National Income
