Suppose a country's output is $440 billion and its population is 110 million. Now suppose that both its output and its population increase by 24 percent. As a result of these changes, its new level of per capita output will be:
A. $4,400.
B. $440.
C. $4,000.
D. $400.
Answer: C
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The two key factors that trigger speculative attacks on emerging market currencies are
A) deterioration in bank balance sheets and severe fiscal imbalances. B) deterioration in bank balance sheets and low interest rates abroad. C) low interest rates abroad and severe fiscal imbalances. D) low interest rates abroad and rising asset prices.
What is one argument made by proponents of in-kind transfers over cash payments to the needy?
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the:
A. consumer equilibrium effect. B. price effect. C. income effect. D. substitution effect.
Which of the following statements is FALSE?
A. The value of total income is equal in value to total output because profit is a cost of production. B. Businesses sell goods and services to households who use their income to pay for them. C. Total income is always greater than total output. D. In the circular flow model, households sell factor services to businesses in return for factor payments.