Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. All figures are in billions of dollars.Domestic Output or Income (RGDP = DI)Consumption$540$540560555580570600585620600640615660630If gross investment is $25 billion, the equilibrium level of real GDP will be
A. $620 billion.
B. $600 billion.
C. $640 billion.
D. $660 billion.
Answer: C
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Which of the following examples definitely illustrates an appreciation of the U.S. dollar?
A) The dollar exchanges for 120 euros and then exchanges for 100 euros. B) The dollar exchanges for 100 yen and then exchanges for 125 euros. C) The dollar exchanges for 1 pound and then exchanges for 1.2 pounds. D) none of the above
If average cost is falling, then marginal cost must be falling.
Answer the following statement true (T) or false (F)
Wealth is redistributed from debtors to creditors when inflation is
a. high, whether it is expected or not. b. low, whether it is expected or not. c. unexpectedly high. d. unexpectedly low.
Most monetarists favor:
A. frequent changes in the growth rate of the money supply to avoid inflation. B. placing the Federal Reserve under the Treasury. C. a steady, gradual shrinkage of the money supply. D. a constant increase in the money supply year after year equal to the potential annual growth rate in real GDP.