Suppose the nominal interest rate is 7 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 7 percent. At the end of the year, you have earned:
A. an increase in your purchasing power.
B. no increase in your purchasing power.
C. no increase in your savings.
D. a decrease in your purchasing power.
B. no increase in your purchasing power.
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Problems caused by stochastic trends include all of the following with the exception of
A) the estimator of an AR(1) is biased towards zero if it's true value is one. B) the model can no longer be estimated by OLS. C) t-statistics on regression coefficients can have a nonnormal distribution, even in large samples. D) the presence of spurious regression..
Define GDP.
What will be an ideal response?
Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis)?
What will be an ideal response?
Refer to the diagram. At disposable income level D, consumption is equal to:
A. CD.
B. D minus CD.
C. CD/D.
D. CD plus BD.