Suppose the nominal interest rate is 4 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 5 percent. At the end of the year, you have earned:
A. a real rate of return of 1 percent.
B. an increase in your purchasing power.
C. a nominal increase in your savings of $40.
D. All of these statements are true.
C. a nominal increase in your savings of $40.
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If the marginal benefit of additional spending on a public health measure is greater than its marginal cost, then total economic surplus
A. will increase if the government increases spending on the health measure. B. is equal to zero. C. will decrease if the government increases spending on the health measure. D. has been maximized.
In the United States since 1900, life expectancy at birth has ________ and the death rate has ________
A) decreased; increased B) increased; increased C) decreased; decreased D) increased; decreased
Which of the following is an example of time series data?
A. Data on the unemployment rates in different parts of a country during a year. B. Data on the consumption of wheat by 200 households during a year. C. Data on the gross domestic product of a country over a period of 10 years. D. Data on the number of vacancies in various departments of an organization on a particular month.
Refer to Figure 7.1. Which of the following statements is incorrect?
A. Bundle A costs less than bundle E. B. Bundle C costs as much as bundle D. C. Bundle B costs more than bundle C. D. Bundle F costs more than bundle C.