The value of both exports and imports are added to the value of national product.
Answer the following statement true (T) or false (F)
False
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
As the size of a nation's outstanding debt gets larger and larger relative to the size of the economy:
a. eventually it will become difficult for the country to borrow in global credit markets. b. the country will have to pay higher real interest rates in order to induce investors to purchase its bonds. c. at some point, the country will be more or less forced to bring spending into line with revenues in order to maintain the confidence of investors. d. all of these are correct.
Refer to the accompanying figure. What is the price elasticity of demand when the price of rice is $6 per pound?
A. 2 B. 0.5 C. 3 D. 0.67
The current yield of a bond:
A. is another term for the yield to maturity. B. is the difference between its future value and its present value. C. equals zero for a zero-coupon bond since these bonds have no coupon payments. D. is another term for the coupon rate.