One year nominal GDP was $36 trillion and the price index was 120. Real GDP that year was:
a. $12 trillion
b. $30 trillion
c. $48 trillion
d. $24 trillion
Answer: b. $30 trillion
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Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product. The new long-run equilibrium will have
A) fewer firms in the market. B) more firms in the market. C) the same number of firms in the market. D) probably a different number of firms, but it is not possible to determine if there will be more or fewer firms. E) a permanent decrease in supply.
Which of the following is likely to have the widest bid-asked spread?
A) A U.S Treasury bill B) A U.S. Treasury note C) A U.S. Treasury bond D) A municipal bond
If the MPC = 0.80, the government purchases multiplier is
A) 2. B) 4. C) 5. D) 8.
Assume a one year U.S. bond pays 4.0% interest and a similar U.K. bond pays 5.2% interest. Which of the following changes will establish interest rate parity?
a. The British pound would be expected to appreciate by 1.2% against the U.S. dollar. b. The U.S. dollar would be expected to depreciate by 1.2% against the British pound. c. The British pound would be expected to depreciate by 1.2% against the U.S. dollar. d. The British pound would be expected to appreciate by 9.2% against the U.S. dollar. e. The U.S. dollar would be expected to appreciate by 9.2% against the British pound.