Given the annual rate of economic growth, the "rule of 72" allows one to
A. determine the growth rate of per capita GDP.
B. calculate the size of the GDP gap.
C. determine the accompanying rate of inflation.
D. calculate the number of years required for real GDP to double.
Answer: D
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If national income increases by $20 million and consumption increases by $5 million, the marginal propensity to consume is
A) 4. B) 0.75. C) 0.5. D) 0.25.
A nation's merchandise trade balance reflects
a. trade in tangible products b. value of exports c. value of imports d. the same information as its balance of payments e. trade in tangibles and intangibles
According to the case, price has a disproportionate effect on the bottom line relative to
A) demand changes. B) total and fixed costs. C) capital expenditures. D) the cost of capital.
Total fixed cost
a. increases as output increases. b. declines as output increases. c. is always zero. d. remains constant even if the firm shuts down.