Question

Ryan purchases a bond issued by Amazon, Inc., which uses the funds to buy new machines for its server online. In the language of macroeconomics,    

A. Ryan and Amazon are both investing.                               B. Ryan is investing, Amazon is saving.

C. Ryan is saving, Amazon is investing.                                   D. Ryan and Amazon are both saving.

What is usually not considered as a determinant of productivity?

A. Physical and human capital per worker                            B. Labor force participation rate

C. Technological knowledge                                                      D. Natural resources per worker

Answer 1

Ryan purchases a bond issued by Amazon, Inc., hence he is investing in financial asset. Amazon in turn uses the funds to buy new machines for its server online, which is investment in real asset. In the language of macroeconomics,    

A. Ryan and Amazon are both investing.

The four determinants of productivity are:

(1) physical capital, which is the stock of equipment and structures that are used to produce goods and services;

(2) human capital, which consists of the knowledge and skills that workers acquire through education, training, and experience;

(3) natural resources, which are inputs into production that are provided by nature; and

(4) technological knowledge, which is society’s understanding of the best ways to produce goods and services.

Hence, Labor force participation rate is not considered as a determinant of productivity.

Option B