The growth rates of actual and potential GDP
A. are similar in both the short and long run.
B. are similar in the short run but not the long run.
C. are similar in the long run but not the short run.
D. are different in both the short and long run.
Answer: C
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This year Gus purchased a used 1972 vehicle from Wee-Rob-U Auto Sales. The dealer paid $500 for it yesterday, and sold it to Gus for $3500. In principle, what happens to GDP?
A) Nothing, because the vehicle was already accounted for in 1972. B) Nothing, because Gus was ripped off. C) It increases by $3000. D) It increases by $3,500. E) It increases by $6,500.
Ball found that an important factor affecting the sacrifice ratio is
A) the flexibility of the labor market. B) the shape of the yield curve. C) the real interest rate. D) the tightness of fiscal policy.
Suppose the recipient of a kidney transplant has stated that she would prefer 5 years of perfect health to the 10 years she expects to live with her transplant. For this person, each of her remaining 10 years of life has a QALY value of
a. ½. b. 2 c. 5 d. 10 e. 50.
During a period of hyperinflation the Fed would probably be doing each of the following except
A. raising the discount rate. B. lowering reserve requirements. C. raising interest rates. D. selling securities on the open market.