Why is real GDP per capita a more accurate measure of economic well-being than real GDP?
a. Real GDP per capita uses more current numbers than real GDP.
b. Real GDP per capita uses less complex numbers than real GDP.
c. Real GDP per capita takes into account population changes, but real GDP does not.
d. Real GDP per capita takes into account ethnic differences, but real GDP does not.
c. Real GDP per capita takes into account population changes, but real GDP does not.
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The quantity theory of money assumes that
a. the national economy tends to operate at less than full. b. the velocity of money is unstable. c. the national economy tends to operate at full employment. d. the velocity of money varies with changes in interest rates.
Define the following terms and explain their importance to the study of economics.
a. Pure monopoly b. Barriers to entry c. Patent d. Natural monopoly e. Sunk costs
In practice, money supply and short-term interest rates are determined by the
A. Treasury and Commerce departments. B. Federal Open Market Committee. C. Board of Governors. D. House and Senate.
When an economy is experiencing a negative output gap, it means that the:
A. actual output is more than their potential output. B. price level is falling. C. price level is rising. D. actual output is less than their potential output.