Assume an economy produces only hamburgers and hotdogs and the base year is 2005. Quantity producedPrices 2005200620052006Hamburgers2,0003,0002$3Hotdogs3,0004,0001$1.50Given the data in the table above, what is the value of real GDP in 2006?
A. $ 7,000
B. $ 5,000
C. $10,000
D. $10,500
Answer: C
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If deficit spending causes an increase in economic activity, it may "crowd in" some potential investment spending
a. True b. False Indicate whether the statement is true or false
In a flexible exchange rate system:
(a) The government intervenes to influence the exchange rate. (b) The exchange rate should adjust to equate the supply and demand of the currency. (c) The Balance of Payments should always be in surplus. (d) The Balance of payments will always equal the government budget.
Opportunity wage refers to the
A. Income an individual loses when he or she quits a job. B. Value of goods and services that could be purchased with a certain individual's income. C. Highest wage an individual would earn in his or her best alternative job. D. Income equivalent of a volunteer worker.
Full employment implies which of the following is reduced to zero?
A. Cyclical unemployment only B. Frictional unemployment only C. Frictional and structural unemployment only D. Frictional, structural, and cyclical unemployment