Suppose that domestic investment in Canada is 10.7% of GDP, and Canadian national savings is 13% of GDP. What is Canada's foreign investment as a percentage of GDP?
A) 1.15% B) 2.3% C) 15.3% D) 23.7%
B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Answer the following statement(s) true (T) or false (F)
1. The short run is any period of time less than one year, while the long run refers to a period of time one year or more in length. 2. The production function describes how much output a firm can generate for various cost levels. 3. Marginal and average products can be plotted in the same graph as total product costs. 4. In deriving the marginal product of labor, we consider the increase in output of an additional worker using additional capital. 5. In order to compute the total cost of production when labor is the only variable, we need only need to know the quantities of labor and the current wage rate.
A recessionary gap develops: a. when actual output exceeds potential output
b. when resource prices are "sticky" upward. c. only when the economy is in recession. d. only when GDP grows by more than 4 percent. e. only when unemployment exceeds its natural rate.
Refer to the table above. If the price level is 120, then the aggregate quantity demanded is ________ than the aggregate quantity supplied and the price level ________
A) greater; rises B) greater; falls C) less; rises D) less; falls E) less; might fall, rise or not change depending on whether real GDP is more than, less than, or equal to potential GDP.