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Multiple Choice Quiz
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1
Durable goods that are in turn used as productive inputs for further production is called:
A)land.
B)labor.
C)capital.
D)entrepreneurial ability.
2
The _______ is the net dollar return per year for every dollar of invested capital.
A)interest rate
B)rate of return on capital
C)rent
D)all of the above
3
Which of the following is a capital good:
A)a robot in a factory.
B)workman's compensation insurance.
C)low-skilled workers.
D)all of the above.
4
Land and capital goods like computers, buildings, and automobiles that are used to produce further goods and services are called:
A)malleable assets.
B)financial assets.
C)tangible assets.
D)none of the above.
5
A mortgage is an example of a:
A)malleable asset.
B)financial asset.
C)tangible asset.
D)all of the above.
6
The interest rate is:
A)the financial return on funds.
B)the annual return on borrowed funds.
C)both a and b.
D)neither a nor b.
7
The real interest rate is:
A)the nominal interest rate minus the rate of inflation.
B)the nominal yield on funds.
C)both a and b.
D)neither a nor b.
8
What do economists call the dollar value today of a stream of income over time?
A)the nominal interest rate.
B)the internal rate of return.
C)the present value.
D)a and b, but not c.
9
Which of the following are functions of the interest rate:
A)It rations out society's scarce supply of capital goods.
B)It induces people to sacrifice current consumption in order to increase the stock of capital.
C)both a and b.
D)neither a nor b.
10
The short-run supply of capital is:
A)perfectly inelastic.
B)backward bending.
C)perfectly elastic.
D)unit elastic.





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