At age 40, Joe is considering quitting his job and going back for a college degree. He needs two more years full-time. Tuition is $10,000 per year. He earns $30,000 per year. A college degree would raise his annual income by $10,000 per year. He will retire at age 70. If these are real amounts (adjusted for inflation), then the discount rate to be used should be
A) the nominal rate of interest.
B) the real rate of interest.
C) the rate of inflation.
D) zero.
B
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Which of the following was an effect of the price ceiling placed on gasoline in the U.S. in the 1970s?
A) Car owners started buying luxury cars that were less fuel-efficient as the price of gas was very low. B) Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied. C) Those who valued gas the most were able to buy gas under the price ceiling. D) The inventory of unsold gas increased and gas stations incurred losses.
C + i + g = gdp + m – x
Indicate whether the statement is true or false
TRUE
What will be an ideal response?
Where Y is GDP, C is consumption, I is investment, G is government spending, T is net taxes, and there is no international trade, private saving equals:
A. Y - T - C. B. Y -T - G. C. C + I + G - T. D. Y - C - I.