If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is
A) 3 - 2.5 = 0.5 percent per year.
B) 3 + 2.5 = 5.5 percent per year.
C) 2.5 - 3 = -0.5 percent per year.
D) [(3 - 2.5 ) ÷ 2.5] × 100 = 20 percent per year.
E) [(2.5 - 3 ) ÷ 3] × 100 = 16.6 percent per year.
A
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Assume that you purchased a $1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you
a. could only sell this bond at a capital loss. b. could sell this bond at a capital gain. c. would not be able to sell this bond. d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.
Refer to the above table. Assuming that opportunity costs are constant, which of the following is a correct statement?
A) The United States has a comparative advantage in computers. B) The United States has a comparative advantage in bicycles. C) Mexico has a comparative advantage in computers. D) Mexico has a comparative advantage in both goods.
Since the beginning of the millennium, the United States has witnessed closure of many Internet start-up companies. According to the model of perfect competition, these companies must have shut down in the short run because:
a. the price they were charging was too high to attract customers. b. the price they were charging was too low to provide sufficient revenues. c. they were not earning enough revenue to cover their total costs. d. they were not earning enough revenue to cover their total variable costs. e. they were not earning enough revenue to cover their total fixed costs.
Which of the following is true of the function of the lender of last resort?
a. Large commercial banks provide loans at low rates of interest to small banks when the small banks are unable to meet the demands of the depositors. b. The central bank reduces the discount rate to facilitate borrowing by commercial banks from the central bank. c. Commercial banks provide loans to customers with bad credit ratings who are unable to get loans from any other sources. d. The central bank reinforces the effect of deposit insurance and reassures bank customers that they will not lose their money.