Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 3 percent. The future value of the $500 after 1 year is
a. $485.44.
b. $496.50.
c. $509.28.
d. $515.00.
d
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Suppose the economy has a high level of unemployment. This would imply
A) that the economy is operating on the SRAS curve and that government spending could be decreased to reduce unemployment. B) that the government should engage in expansionary fiscal policy and increase the tax rate. C) that fiscal policy has been ineffective and should be abandoned. D) that the economy is operating to the left of the LRAS curve and that government spending could be increased to reduce unemployment.
Households receive transfers from ________, and firms receive transfers from ________
A) firms; households B) government; government and households C) government; no one D) firms and government; government E) government; government
Suppose the following two events occur in the market for elementary school teachers:
a. Overcrowded schools and education budget cuts have discouraged young college students from pursuing careers in teaching. b. With an increasing birth rate, the number of children entering the elementary school system is expected to increase significantly over the next ten years. What is likely to happen to the equilibrium wage and quantity of teachers as a result of these two events? A) The equilibrium wage rises and the effect on the equilibrium quantity of elementary school teachers is indeterminate. B) The equilibrium quantity falls and the effect on the equilibrium wage of elementary school teachers is indeterminate. C) The equilibrium quantity falls and the equilibrium wage of elementary school teachers rises. D) The equilibrium quantity and the equilibrium wage of elementary school teachers fall.
Of the following, which is the largest source of government funds in the long run?
A) government borrowing B) government transfers C) user fees D) taxation