At which point is the real wealth lowest?
a. A
b. B
c. C
d. Y
c. C
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When the Fed purchases government securities, it
A. increases banks' reserves and makes possible an increase in the money supply.
B. decreases banks' reserves and makes possible a decrease in the money supply.
C. automatically raises the discount rate.
D. uses discounting operations to influence margin requirements.
e. has no effect on either the money supply or the discount rate.
Consider a firm whose final output (and sales) in a particular year has a value of $1,200
To produce these goods, the firm used $500 worth of intermediate goods it had purchased in previous years plus $200 worth of newly-purchased intermediate goods. In the subsequent year, this same firm again sells $1,200 worth of final goods, but in this year has purchased $700 worth of intermediate goods, of which $100 is not used in current production but, rather, added to the firm's inventory. For each of these two years, calculate the value added by this firm. For each of these two years, calculate the contribution of this firm to the economy's GDP.
Suppose that the government decided to increase interest rates in order to encourage saving. Would this likely lead to an increase in investment and higher future economic growth rates? Explain
Each month, the Bureau of Labor Statistics calculates unemployment by
a. surveying all workers in the economy. b. surveying a random sample of households. c. making projections based on census data. d. surveying large business and government employers.