If the full-employment level of income in Figure 9.7 is $300 billion, there is
A. Achievement of macro equilibrium.
B. An inflationary gap of $500 billion per year.
C. A recessionary gap of $50 billion per year.
D. A recessionary gap of $100 billion per year.
Answer: D
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For economic efficiency, which of the following conditions should be met?
a. Scarcer goods should have lower prices. b. More abundant goods should have lower prices. c. More abundant goods should have higher prices. d. All goods should have equal prices.
Suppose interest of 5% for two years can be earned on $1,000 saved today with no risk. What is the least amount a person would need to have a 50% chance of winning to be willing to face a 50% chance of losing $1,000 today and be considered risk averse?
a. $907.03 to be paid in two years b. $1,000.01 to be paid in two years c. $1,100.01 to be paid in two years d. $1,102.51 to be paid in two years
The two most important factors contributing to increased productivity in industrialized countries in the twentieth century were:
A. technological progress and increases in the capital stock. B. higher relative prices and technological progress. C. higher relative prices and a larger labor supply. D. technological progress and increases in the labor supply.
For a commercial bank, the term "reserves" refers to
What will be an ideal response?