If an economy grows at 6 percent per year, how many years would it take for real GDP to double?
What will be an ideal response?
Using the rule of 70, it would take 70/6 = 11.67 years for real GDP to double.
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Using the data in the above table, if income is on the x-axis and the amount spent on restaurant meals is on the y-axis, the graph of the two variables would be
A) upward sloping. B) downward sloping. C) vertical. D) horizontal.
Limited commitment means
A) one cannot credibly promise something. B) one saves only part of what is optimal. C) only some households are allowed to save. D) there is rationing on the credit market.
Automatic stabilizers
A) are never altered. B) often make any downturn in the economy worse. C) must be determined by the Congress in each budget. D) work counter-cyclically to moderate the business cycle.
In the figure above, what is Gap's economic profit?
A) zero B) $5,000 C) -$5,000 D) -$1,160