If Year 2 is the base year, the real GDP of Year 1 is
A) $800.
B) $1050.
C) $1900.
D) $2400.
B
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A firm's level of investment is tied to the interest rate
a. only when the firm has to borrow funds to buy capital b. only when the firm has to borrow funds to buy stocks c. only when the firm already has the funds and could lend them d. because the interest rate represents the opportunity cost of investing in capital e. because investments are always made with borrowed funds
Mrs. Smith is operating a firm in a competitive market. The market price is $6.50 . At her profit-maximizing level of output, her average total cost of production is $7.00, and her average variable cost of production is $6.00 . Which of the following statements about Mrs. Smith's firm is correct?
a. Mrs. Smith is earning a loss and should shut down in the short run. b. Mrs. Smith is earning a loss but should continue to operate in the short run. c. Mrs. Smith is earning a profit since the price is above the average variable cost. d. Without knowing Mrs. Smith's marginal cost, we cannot determine whether she should stay in business or shut down.
What is the present value of a payment of $100 to be made one year from today if the interest rate is 6 percent?
a. $105.26 b. $105.00 c. $97.24 d. $94.34
In general, the number of firms is lesser in monopolistic competition compared to oligopoly
a. True b. False Indicate whether the statement is true or false