Refer to the information provided in Table 20.4 below to answer the question(s) that follow.
Table 20.4GermanyChileBeerWineBeerWine(cases)(cases)(cases)(cases)75030 060152412453018 24304512 361560 6 48075 0 60 Refer to Table 20.4. In Chile, the opportunity cost of 1 case of wine is
A. 1/2 case of beer.
B. 1 case of beer.
C. 2 cases of beer.
D. 4 cases of beer.
Answer: A
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A risk-seeker is likely to:
A. buy a government bond instead of a stock. B. put money in a savings account instead of investing in a start-up company. C. invest in a start-up company instead of putting his money under his mattress. D. put his money under his mattress instead of buying company stock.
Explain how it is possible for the economy to produce at a point beyond its institutional production possibilities frontier (PPF), but not beyond its physical PPF
Answer the following statement(s) true (T) or false (F)
1. As long as it is generally accepted in exchange for services and goods, anything can be considered money. 2. Money has two main economic functions: to act as a medium of exchange and to act as a store of value. 3. Naya knows that a pound of wild rice costs $3.49 and that a pound of granulated sugar costs $0.89. The fact that she can determine this illustrates money’s function as a means of stored value. 4. Fiat money is money that has been established by custom or tradition. 5. Savings deposits are considered part of the M2 definition of money, but not the M1 definition.
If we knew that nominal GDP was currently $7500 billion, and that current GDP in dollars of 1992 purchasing power was $5000 billion, what would we know about the GDP deflator?
A) It would be .667. B) It would be 150. C) Nothing until we had current information on the price level, such as consumer price index figures. D) Only that a dollar buys more currently than it bought in 1992. E) Only that a dollar currently buys less than it bought in 1992.