Spending on new capital goods, new homes, and the addition of unsold goods to company inventories is included in:
A. service spending.
B. government purchases.
C. investment spending.
D. consumption expenditures.
Answer: C
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Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases:
A) the opportunity cost of buying sweaters increases. B) the opportunity cost of buying sweaters decreases. C) the opportunity cost of buying shirts increases. D) There is no change in the opportunity cost of consuming either good.
Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2016. You know that average prices have risen steadily since 1961. You earn
A) more than 5 times as much as your grandfather in terms of real income. B) less than 5 times as much as your grandfather in terms of real income. C) less than 5 times as much as your grandfather in terms of nominal income. D) 5 times as much as your grandfather in terms of real income.
Economists who prefer a broader definition of money prefer the:
a. M4 measure of the money supply to the M1 measure. b. M2 measure of the money supply to the M1 measure. c. M3 measure of the money supply to the M2 measure. d. prefer the M1 measure of the money supply to the M2 measure.
Banks that operate under Islamic law are no longer considered intermediaries between borrowers and lenders because they are not allowed to charge interest
a. True b. False Indicate whether the statement is true or false