Exhibit 11-6Use the table below to answer the following question(s).
Nominal GDP
GDP
Year(billions)
deflator
Year 1 600
100.0
Year 21,000
133.3
Refer to Exhibit 11-6. Measured in terms of Year 1 prices, real GDP in Year 2 was:
A. 600.
B. 750.
C. 900.
D. 1,333.
Answer: B
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What percent of the world's nations have at least five significant ethnic populations?
a. 0–10 b. 10–20 c. 20–30 d. 30–40 e. over 40
"Policy ineffectiveness" refers to the hypothesis that monetary and fiscal policy actions that change aggregate demand will
a. neither affect output nor employment even in the short run. b. affect output and employment in both the short run and long run. c. affect output but not employment in the short run. d. not affect output but will affect employment in the long run.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and monetary base rises. b. The real risk-free interest rate falls and monetary base falls. c. The real risk-free interest rate rises and monetary base falls. d. The real risk-free interest rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
At the equilibrium level of income, it must be true that total
A. income equals total spending. B. product equals total output. C. output equals total inventory. D. income equals total saving.