When all currencies are tied directly to gold, then
A) currency exchange rates throughout the world are flexible.
B) currency exchange rates throughout the world are fixed.
C) the world's stock of gold cannot change.
D) the price of each nation's currency in terms of gold is flexible.
B
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The total volume of business sales in our economy is several times larger than GDP because ________.
A. GDP does not take taxes into account B. GDP grossly understates the value of our annual output C. GDP excludes intermediate transactions D. Total sales are in money terms and GDP is always stated in real terms
Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today). Of the following, which is the lowest annual interest rate at which you would prefer the lump-sum payment over the four annual payments?
a. 2% b. 5% c. 7% d. 10%
Which of the following statements is the best justification of the use of GDP per capita to compare welfare between nations?
A. GDP per capita is commonly used as a measure of welfare so it must be a valid measure. B. GDP per capita is independent of the country's currency so it is not subject to change due to variations in exchange rates. C. GDP per capita is calculated in a consistent and reliable way so it is not subject to measurement errors. D. GDP per capita is highly correlated with alternative measures of quality of life.
Consider a two-country, two-commodity model. The table below shows the units of Good X and Good Y produced in Country A and Country B per labor hour. The number of labor hours required to produce one unit of Good X in Country A is ProductivityCountry ACountry BGood X1.000.50Good Y0.200.70
A. 1. B. 0.5. C. 2. D. 1.43.