The rule of 72 implies that a country with a growth rate of 8 percent will double its income in about:
A. 12 years.
B. 6 years.
C. 4 years.
D. 9 years.
Answer: D
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Real GDP per person in Richland is $20,000, while real GDP per person in Poorland is $10,000. However, Richland's real GDP per person is growing at 1 percent per year, and Poorland's real GDP per person is growing at 3 percent per year. After 50 years, real GDP per person in Richland minus real GDP in Poorland is:
A. positive and greater than $10,000. B. negative. C. zero. D. positive but less than $10,000.
Adam Smith believed that the rich derive the most enjoyment from their wealth by knowing that others observe their consumption
Indicate whether the statement is true or false
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the monetary base in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls and monetary base falls. b. The real risk-free interest rate rises and monetary base falls. c. The real risk-free interest rate falls and monetary base rises. 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.
Small-denomination time deposits are part of M2, but not part of M1
Indicate whether the statement is true or false