Nominal gross private domestic investment was $1888.0 billion in 2008 and rose to $2057.4 billion in 2009. The chain-weight price index for gross private domestic investment was 106.6 for 2008 and 110.3 for 2009, where 2005 was the base year. Calculate the percent change in real gross private domestic investment (rounded to the nearest percentage point) from 2008 to 2009.
A. 3%
B. 4%
C. 5%
D. 1%
Answer: C
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Poorly timed discretionary policy can do more harm than good. Getting the timing right with fiscal policy is generally
A) far less difficult than with monetary policy. B) about the same difficulty as with monetary policy. C) less difficult than with monetary policy. D) more difficult than with monetary policy.
Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and
A) the difference between consumer surplus and producer surplus is maximized. B) economic surplus is minimized. C) consumer surplus plus producer surplus is maximized. D) economic surplus plus consumer surplus equals producer surplus.
The long-run aggregate supply curve is a vertical line passing through
A) the natural rate of output. B) the natural-rate price level. C) the actual rate of unemployment. D) the expected rate of inflation.
At any point on the LM curve
a. there is labor market equilibrium. b. money supply equals money demand. c. equilibrium output equals potential output. d. both commodity and money market are necessary for equilibrium. e. both b and c.