The annual cost of producing the entire output of final goods and services in an economy is
A. equal to the quantity of total output produced.
B. equal to total income.
C. greater than the total income of households in the economy.
D. equal to the total income of households in the economy only if profits are zero.
Answer: B
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If a bond offers $2,000 in interest payments at the end of each of next 5 years and a repayment of $10,000 also at the end of the 5 years and the current discount rate is 3 percent, what is the market price for the bond?
A) $12,874 B) $18,256 C) $7,593 D) $17,786
The cross-price elasticity of demand of products "M" and "N" is zero. This implies that "M" and "N" are
A) substitute products. B) complementary products. C) independent products. D) unique goods, as the price elasticity of demand for one of them is zero.
In recent years, the United States has had large:
A. current account surpluses. B. current account deficits. C. balance of trade surpluses. D. balance of payments surpluses.
The structural surplus
A) is legally required to be positive. B) fluctuates over the business cycle. C) is, by definition, equal to the negative of the cyclical deficit. D) equals the actual surplus plus the cyclical surplus. E) is the government budget surplus that would exist if the economy was at full employment.