Which of the following is correct?
a. Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with a much accuracy.
b. Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.
c. Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy.
d. Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.
b
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Suppose you hit a progressive jackpot on a slot machine in a casino in Atlantic City and are given the choice of the following prizes:
Prize 1: $150,000 to be received right away, with three additional payments of $150,000 to be received each year for the next three years. Prize 2: $500,000 to be received right away. If the interest rate is 5 percent, what is the present value of each prize?
Financing government spending by selling bonds to the public, which pays for the bonds with currency,
A) leads to a permanent decline in the monetary base. B) leads to a permanent increase in the monetary base. C) leads to a temporary increase in the monetary base. D) has no net effect on the monetary base.
Champlain College in Vermont runs a satellite campus in Dublin, Ireland. This is an example of:
A. foreign portfolio investment. B. foreign direct investment. C. importing. D. exporting.
Since the end of World War II, the economy of the United States has been more influenced by stabilization policy. One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from
a. more severe recessions and depressions. b. higher levels of unemployment and lower rates of employment growth. c. lower rates of growth in real and nominal GDP. d. more persistent periods of inflation.