macro test 1 pt 2
Terms
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- Why do some countries have more physical and human capital and use more advanced technology?
- institutions and incentives
- Why do some countries obtain greater output from the resources they have than others?
- institutions and incentives
- Institutions are _____ that influence people's choices. (5)
- laws, customs, moral principles, superstitions, and cultural values
- institutions of economic growth (5)
- property rights, honest gvt, political stability, dependable legal system, comp/open markets
- property rights include the rights to :
- receive benefits, sell/transfer, exclude from property
- a honest gvt does not :
- deviate from its commitments
- political stability implies between individuals with different backgrounds or beliefs.
- limited internal conflict
- Spriv= (formula)
- Y+Tr+INT-C-T
- nvm
- nvm
- the total amount of physical capital existing in an economy at any moment in time
- capital stock
- depreciation of capital formula
- interest+existing capital-depreciation
- Spub=(words)
- taxes-gvt consumption-transfers
- Spub=(formula)
- T-INT-G-TR
- total national savings equals
- private savings+public savings
- Snet=what in a closed economy
- investment
- Snet simplified equals
- investment +net exports
- When interest rates are high people tend to _____. therefore savings is ____ related to interest
- save more, positively
- When the interest rate is low, firms tend to _____
- borrow more
- There is a ____ relationship between the interest rates and investment.
- negative
- Investment above saving can be attained by buying goods from abroad. In this case, the country runs a ______
- trade deficit
- when a country's savings are less than its investment and the world interest rate is below the intersection of savings and investment
- trade deficit
- If the world interest rate is above the intersection of the saving and investment curves, saving is greater than investment and the country is running a ____ ____
- trade surplus