Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate can be used to stimulate spending in an economy in an attempt to boost economic growth.
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- 11. As per the Stolper-Samuelson analysis, in an open economy, the factor used extensively in the economic sector with an increasing price:(a) benefits as a producer, but loses more as a consumer.(b) benefits, regardless of the usual consumption preferences.(c) certainly benefits as a consumer.(d) loses both as a producer and as a consumer.2. Suppose that two countries (A and B) are exactly alike in every respect except that thecitizens of country A have a higher saving rate than the citizens of country B.Which country will have the higher level of: i) Capital per worker in the steady state?ii) Output per worker in the steady state?iii) Rate of growth of Output per worker in the steady state?Use one graph to illustrate the answer and explain your answer of i), ii), and iii)18. The Goal of is to promote price stability, full employment, and economic growth.
- true or false 1. Countries like finlamd and norway are unlikely to suffere from the scarcity problem as defined in economic theory? 2. in the economic circular flow model, capital formation is a flow that is mainly linked to firms? 3. equilibrium in any market can be described as the point where demand is equal to supply.9. The People's Republic of China has an estimated $101.54 trillion of capital with a depreciation rate of 5.2% per year. If its GDP is $20.5 trillion and its saving rate is 45% would we expect China's GDP to be growing or shrinking? a. growing, I> dK b. growing, I dK d. shrinking, I < dKQUESTION 2 2.a) Provide a definition of ‘technological capability’ and ‘social capability’ and describe the differences between them (5 points). Why can we say that innovation has a ‘systemic’ nature? (3 points). 2.b) Financial development, social capital, favourable business regulation, trade openness are different aspects of ‘social capability’ influencing innovation processes and, therefore, economic development. Make a ranking of these factors according to their observed degree of importance for economic development (3 points). Explain why ‘inclusiveness’ and ‘equality in opportunities’ can strengthen the innovation capability of an economy (5 points). 2 2.c) Figure 1 below shows the cross-country correlation between the development of the education system and the level of economic development. Analyse Figure 1 by arguing about the importance of the education system for economic development in low, emerging, and developed countries (9 points).
- 16. Which of the following best describes the concept of foreign direct investment (FDI)? A) Investment made by a company or individual in one country in business interests in another country B) Investment made by the government in domestic industries to promote economic growth C) Investment made by individuals in financial markets within their own country D) Investment made by foreign governments in domestic industries to promote economic developmentRead the following premise carefully and answer the questions specifically and in detail, you must answer the request with the correct information, showing that you understand and can properly apply the concepts. Try to address all the elements of each question and always express the answers in your own words. "In the face of unstable economic growth due to a recession or accelerating inflation, potential problems with large public debt include higher income inequality, reduced economic incentives, and crowding out of private investment".2. Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.4) a. There is a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future because to increase consumption in the future households must save, thus providing funds for investment. consumers do not like to save. consumers like to both save and spend. producers always respond to what consumers want. b. Typically a higher saving rate is associated with higher investment rates and lower rates of growth. lower investment rates and higher rates of growth. higher investment rates and higher rates of growth. lower investment rates and lower rates of growth. c. Banks and other financial institutions eliminate poor business decisions. reduce the risk of borrowing. focus on long-term projects. help allocate resources to the most productive investments.
- 2. Do you think the financial crisis has an impact on the economy? Give three (3) examples of how a financial crisis could impact economic growth.Economic Growth II – Work It Out Question 2 a. In the initial steady state, what is the savings rate (s)? In the nation of Wooknam, the capital share of GDP is 40 percent, the average growth in output is 3.5 percent per year, the depreciation rate is 4.0 percent per year, and the S = % capital-output ratio is 5.5. Suppose that the production function is Cobb-Douglas and that Wooknam has been in a steady state. Round answers to two places after the decimal when necessary. b. In the initial steady state, what is the marginal product of сapital (MPK)? MPK =When the government budget deficit rises, national saving is reduced, interest rates rise, and investment falls. Select one: a. True b. False