Macro Chapter 15 Flashcards Quizlet PDF

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1/17/2019

Macro Chapter 15 Flashcards | Quizlet

Macro Chapter 15

42 terms

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Terms in this set (42) Human wealth is

the present discounted value of expected futur labor income.

Which of the following

non-human wealth and human wealth

best defines total wealth? Which of the following

a permanent increase in salary

would cause an increase in human wealth? For this question, ignore

A) winning $10,000 in the lottery

tax considerations of

B) inheriting $10,000 from a relative

each of the following.

C) obtaining $10,000 by winning a lawsuit

Assume that

D) getting a one-time $10,000 bonus from your

consumption decisions

E) all of the above

are made according to the permanent income theory. Which of the following would lead to the smallest increase in current consumption? https://quizlet.com/172727376/macro-chapter-15-flash-cards/

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Figures on "mean

Macro Chapter 15 Flashcards | Quizlet

social security benefits.

wealth" of the elderly (ages 65-69) show that ¼ of wealth consists of Which of the following

a low income person expecting a dramatic rise in income

people—none of whom

in the future

has any financial or housing wealth—is most likely to be spending all of their current income? Which of the following

A) Banks will not always lend money to those who want to

is a reason that

consume more than their income.

consumption depends

B) The anticipation of future financial distress makes some

on current income, and

people reluctant to borrow.

not just on total wealth?

C) Low income people may prefer to postpone some consumption until later years, when their incomes are higher. D) all of the above

Suppose that, when the

cash flow matters for investment.

price of steel drops, steel companies tend to cut back on investment in their non-steel activities more than other firms in these same non-steel activities. This would support the idea that Suppose you are given

financial wealth

a rare antique by a long-lost relative. The value of this rare antique would be included in which of the

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following types of As of 2005, some wealth?

Macro Chapter 15 Flashcards | Quizlet

housing wealth

analysts were concerned that there was a "bubble" in the U.S. housing market. Suppose there is a reduction in real estate prices. This reduction in real estate prices would have the most direct effect on which of the following types of wealth? The reduction in stock

financial wealth

prices will have the most direct effect on which of the following types of wealth? An increase in which of

the ratio of total sales to the capital stock

the following variables should cause an increase in profit per unit of capital? Suppose there is an

human wealth

increase in income. This increase in income would have a direct effect on which of the following? Human wealth is a

all of the above

function (i.e., affected by changes in) of which of the following variables? https://quizlet.com/172727376/macro-chapter-15-flash-cards/

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The "depreciation rate"

Macro Chapter 15 Flashcards | Quizlet

how much usefulness a machine loses from year to year.

tells us The data shows that

tends to decrease in recessions, increase in expansions.

total profit in the U.S. economy Which of the following

A drop in consumer confidence, with unchanged current

is evidence that

income, often causes total consumption spending to fall.

consumption depends on total wealth, and not just on current income? Which of the following

A) A change in sales should have more impact on current

statements is true?

investment if it is expected to be permanent rather than temporary. B) On a percentage basis, investment is more volatile than consumption. C) In terms of dollars, investment and consumption are about equally volatile. D) all of the above E) none of the above

Suppose there is a tax

human wealth

cut. This tax cut would have a direct effect on which of the following? Which of the following

A) profit per unit of capital will increase

will occur when the

B) profit per unit of capital will decrease

capital stock increases?

C) there will be no change in profit per unit of capital D) there will be an ambiguous effect on profit per unit of capital E) none of the above

For this question,

an increase in profit per unit of capital.

assume that firms experience an increase in sales. We would expect that this increase in sales will cause https://quizlet.com/172727376/macro-chapter-15-flash-cards/

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Which of the following

Macro Chapter 15 Flashcards | Quizlet

a permanent reduction in salary

would cause a reduction in human wealth? Suppose current sales

A) decrease exactly by $100 million.

increase by $100 million.

B) increase by exactly $100 million.

Investment theory

C) increase by less than $100 million.

suggests that current

D) decrease, but by less than $100 million.

investment must

E) none of the above...