7) What roles do physical capital, human capital, technology, and natural resources play in influencing long-run economic growth of aggregate output per capita?
8) Through its policies and institutions, how has the United States influenced U.S. long-run economic growth? Why might persistently large borrowing by the U.S. government ultimately limit long-run economic growth in the future?
5) Use the market fro loanable funds shown in the accompanying diagram to explain what happens to private savings, private investment spending, and the rate of interest if the following events occur. Assume the economy is closed.
a. The government reduces the size of its deficit to zero.
b. At any given interest rate, consumers decide to save more. Assume the budget balance is zero.
c. A any given interest rate, business become very optimistic about the future profitability of investment spending. Assume the budget balance is zero.
7) Explain why equilibrium in the loanable funds in market maximizes efficiency.
Macroeconomics see diagram for question 5
