Assume that the future economy follows past trends. If the nominal GDP in 2025 is $30,000 billion and the base year is 2020, which of the following would most likely be the real GDP for 2025?
a. $27,000 billion
b. $30,000 billion
c. $32,000 billion
d. $34,000 billion
a. $27,000 billion
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Suppose that there are 10 firms in an industry, each accounting for 10 percent of industry sales. Two of these firms decide to merge. Which of the following statements about the impact of this merger is (are) INCORRECT?
A) The merger causes the four-firm concentration ratio to increase from 40 to 50. B) The merger causes the HHI to increase by 100. C) The merger will not change the HHI unless the industry's sales increase. D) Both answers A and C are incorrect.
Economic reasoning is based on the premise that: a. all decisions or actions are costless
b. only non-economic decisions or actions have a cost associated with them. c. only economic decisions or actions have a cost associated with them. d. all decisions and actions have a cost associated with them.
Why is the tax multiplier smaller than the government spending multiplier?
A $10,000 federal subsidy per student in higher education would benefit
a. a student by exactly $10,000 b. a university by exactly c. the student and the university in such a way that they would split the $10,000. d. the student and the university in such a way that they would each get $10,000.