If real GDP has increased by 3 percent and nominal GDP has increased by 5 percent, then:

A. net factor income is 2 percent.
B. inflation is 2 percent.
C. depreciation is 2 percent.
D. net exports are 2 percent.


Answer: B

Economics

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If the nominal interest rate is above its equilibrium value, then

A) the demand curve for money shifts rightward and the interest rate rises. B) the demand curve for money shifts leftward and the interest rate falls. C) people sell financial assets and the interest rate falls. D) the supply curve of money shifts leftward and the interest rate rises. E) people buy financial assets and the interest rate falls.

Economics

Explain the relationship between net exports and net foreign investment

What will be an ideal response?

Economics

If a multi-plant firm has three plants and uses each of the plants to produce its product, the marginal cost to produce the firm's product is equal to ________.

A) the sum of the marginal costs from each of the three plants B) the plant with the highest marginal cost C) the plant with the lowest marginal cost D) the sum of the average fixed costs from each of the three plants

Economics

Lee and Cody are playing a game in which Lee has the first move at A in the decision tree shown below. Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch. Suppose Lee and Cody enter into a binding non-aggression agreement. As part of that agreement, they negotiate a fine that Cody would have to pay to Lee if Cody chooses aggression after Lee chooses cooperation. For the fine to be effective, it would have to be:

A. at least 15. B. equal to 25. C. less than 15. D. equal to 40.

Economics