Small differences in economic growth rates can eventually produce large differences in living standards because of compounding.
Answer the following statement true (T) or false (F)
True
See the discussion of compounding in the textbook under "The Importance of Growth for Living Standards."
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If the Fed allows the federal funds rate to fall well below the rediscount rate it is likely that the Fed will
A) lower the rediscount rate and increase c, the proportion of demand deposits held as cash. B) raise the rediscount rate. C) increase loans to banks. D) decrease loans to banks.
GDP as predicted by the classical model is
a. lower than the actual level of GDP b. higher than the actual level of GDP c. smoother and steadier than actual GDP d. more unstable over time than actual GDP e. an accurate predictor of actual GDP
If velocity is constant, which of the following results flow from the quantity equation?
A) Nominal GDP could change only if there were a change in the money supply. B) In the short run, nominal GDP could change only if there were a change in the money supply and in the long run, nominal GDP could change only if there were a change in the money supply. C) In the short run, nominal GDP could change only if there were a change in the money supply but in the long run, nominal GDP is affected by changes in any component of GDP. D) In the short run, nominal GDP is affected by changes in any component of GDP but in the long run, nominal GDP could change only if there were a change in the money supply.
Which of the followingbestdescribes the economic concept of utility?
A. Utility is the total number of units a consumer buys. B. Utility measures the usefulness of goods, such as tools or food, and so goods such as artwork or attractive landscaping by definition has no utility. C. Utility measures the satisfaction, or pleasure, that people receive from consuming a good or service. D. Utility and price are interchangeable values.