Which of the following expenditures would increase the investment component of U.S. GDP?
A. You purchase a new car.
B. You purchase 1,000 shares of stock.
C. You pay a commission to your stock broker for selling some stocks that you owned.
D. You purchase a new house.
Answer: D
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What is the meaning of the phrase ceteris paribus to an economist?
(A) The way that economists consider the changes in demand for a good. (B) A projection about the change in availability of a good. (C) An assumption that nothing but the price of an item will change. (D) A conjecture about the changes in consumer behavior.
The application of Solow's growth theory to the explanation of the slowdown in productivity growth in the United States suggests that the slowdown is primarily caused by
A) reduced growth in the capital stock per hour of work. B) reduced growth in the technical change or total factor productivity. C) slow residual growth of the capital stock. D) ignorance since people save and invest less.