"Equilibrium" is defined in economics in a special way, but it is fair say that if a nation is in short-term equilibrium, then:
a. It is close to full employment.
b. It is close to price stability.
c. It is operating at relatively high level of performance.
d. All of the above.
e. None of the above.
.E
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When the interest rate is 7.5%, what is the present value of a perpetuity paying $50 a year forever?
a. $375.00. b. $465.11. c. $537.50. d. $666.67.
Suppose the MPC is .6 and consumption increases by $8 billion. Consequently, total income through the multiplier effect will:
a. $20 billion b. $8 billion c. $15 billion d. $13.3 billion
Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. Initially buyers believe that 50% of used cameras in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer cameras are sold in equilibrium?
A. 10 B. 15 C. 20 D. 25
The endogenous variable in the aggregate supply curve is ________
A) output B) the real interest rate C) inflation D) planned expenditure E) none of the above