If you left $2,500 on deposit with a bank promising to pay you a 5 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:
A. $2,625
B. $28,668
C. $11,467
D. $328,750
Answer: B
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The table above shows a production possibilities frontier for an economy. If the economy tried to produce a combination of 250 loaves of bread and 800 books,
A) there is some unemployment. B) it cannot produce this combination because it lacks enough resources or technology. C) it is enjoying a free lunch. D) the tradeoff between bread and books is inefficient. E) there is full employment.
If the quantity of money starts to grow more rapidly than real GDP and velocity does not change, the result is
A) slower growth in the price level. B) an increase in investment. C) more rapid growth in potential GDP. D) the inflation rate rises. E) an eventual slowing in the growth rate of the quantity of money.
It does not make economic sense to maximize short run performance over long run performance
Indicate whether the statement is true or false
In the early 1800s, there was a smallpox outbreak in a remote part of Russia. The government sent in a large group of army doctors, but they were too late to stop the epidemic. Thirty years later, there was another smallpox scare. A local statistician
cautioned the government against a similar response, noting the increased mortality and high number of army doctors during the earlier epidemic. Was the statistician providing good advice?