Refer to the scenario above. If both economies have the same depreciation rate, then which of the following statements will be true?
A) Economy A will have a greater capital stock and a lower GDP than economy B.
B) Economy A will have a greater capital stock and GDP than economy B.
C) Economy A will have a lower capital stock and GDP than economy B.
D) Economy A will have a lower capital stock and a greater GDP than economy B.
B
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With a 10% reserve requirement ratio, a $100 deposit into New Bank means that the maximum amount New Bank could lend is
A) $90. B) $100. C) $10. D) $110.
Which of the following is included in M2 but is not included in M1?
a. Eurodollar deposits b. savings accounts c. traveler's checks d. checkable deposits
Given the inverse demand function P(Q) = 250 - Q, what is the demand function?
A. Qd = D(P) = 250 - P B. Qd = D(P) = 250/P C. Qd = D(P) = P + 250 D. Qd = D(P) = 250 + P
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls and real GDP rises. b. The real risk-free interest rate rises and real GDP remains the same. c. The real risk-free interest rate and real GDP remain the same. d. The real risk-free interest rate falls and real GDP falls. e. There is not enough information to determine what happens to these two macroeconomic variables.