What happened to real GDP and the inflation rate during the recession of 2007-2009?
What will be an ideal response?
Real GDP fell from 0.2% above potential GDP during the second quarter of 2007 to 7.4% below potential GDP during the third quarter of 2009. The inflation rate rose from 1.8% during the fourth quarter of 2006 to 3.2 % during the third quarter of 2008, before decreasing to ?0.4% during the second quarter of 2009.
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Which is the more efficient use of one's tight budget: going to a first-run movie at $7.50 or waiting for the video to be available through Netflix?
A) Going to the first-run movie B) Waiting for the video C) Doing neither, especially if one's budget is tight. D) It depends on the chooser's own evaluations of costs and benefits.
The bowed-outward shape of a PPF
A) is due to capital accumulation. B) reflects the unequal application of technology in production. C) illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis. D) is due to the existence of increasing opportunity cost.
The secular trend growth rate is the:
A. difference between actual output and the average growth in the economy. B. rate of growth in per capita output in any one year. C. rate of growth in any one year. D. rate of growth of potential output.
Country Y has fifteen thousand acres of land and forty-five thousand laborers, whereas the Rest of the World has one hundred thousand acres of land and two hundred thousand laborers. These countries produce a labor-intensive Good A, and a land-intensive Good B. Based on the information given here, we can conclude that
A. Country Y is relatively labor-abundant. B. the factor proportions are the same in both Country Y and the Rest of the World. C. Country Y enjoys absolute advantage in the production of Good B. D. the Rest of the World is relatively labor-abundant.