Figure 2.1Refer to Figure 2.1. If you are producing 600 tons of agricultural products per year, what is the maximum amount of manufactured products you can produce per year?
A. 300 tons
B. 500 tons
C. 600 tons
D. 700 tons
Answer: A
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If a 4 percent rise in the price of peanut butter lowers the total revenue received by the producers of peanut butter by 4 percent, the demand for peanut butter
A) is elastic. B) is inelastic. C) is unit elastic. D) has an elasticity of 2.0.
Assume that for the fourth quarter of 2012, nominal GDP was $245 billion, potential real GDP was $260 billion, and the GDP deflator was 112. According to Okun's law, the cyclical unemployment rate during the fourth quarter of 2012 was
A) 2.9%. B) 3.1%. C) 8.0%. D) 8.4%.
Ace has always been a top student, so it was no surprise he won a $1,500 scholarship from the company where he worked summers to help with college expenses. Ace decides to spend his scholarship money on a new Apple MacBook. How will GDP be affected by Ace's recent purchases?
A. Consumption will go up by $1,500, because a computer is a durable good. B. Investment will go up by $1,500, because a computer is a durable good. C. GDP will not be affected, since Ace acquired the computer with scholarship money. D. Consumption will go up by $1,500, because a computer is a nondurable good.
Unemployment payments
a. fall during periods of prosperity and thus reduce inflationary pressures b. fall during periods of prosperity and thus increase inflationary pressures c. fall during recessions and thus increase the problem of unemployment d. rise during periods of prosperity and thus increase inflationary pressures e. rise during recessions and thus increase the problem of unemployment