# (15) All of the following would be considered capital goods, except o a dump truck. o...

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(15) All of the following would be considered capital goods, except o a dump truck. o a new factory o on-the-job training. All of the above are capital goods. (16) What are the sources of savings in the economy? Business savings and household savings Private savings by households, government savings, and savings by foreigners - The difference between income and spending of households The difference between income and spending of households and businesses (17) How is the level of investment related to the level of savings in the economy? The higher the level of savings, the higher the level of investment. The lower the level of savings, the higher the level of investment. The relationship depends on how firms behave. Investment depends on interest rates, not savings. (18) What is the effect on growth of eliminating trade barriers? Domestic producers are forced out of business, and growth slows. Domestic producers are forced to compete with importers, and productivity and growth increase. The domestic economy is unaffected. Consumers tend to substitute domestic goods for imports.

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