Which of the following statements is TRUE?
A) Bank failures inflict serious financial harm on individual depositors.
B) Bank failures do not inflict serious financial harm on individual depositors.
C) Bank failures inflict not only serious financial harm on individual depositors, but also harm the macroeconomic stability of the economy.
D) Bank failures inflict serious financial harm on individual depositors, but fortunately do not harm the macroeconomic stability of the economy.
E) Bank failures only inflict serious financial harm on the macroeconomic stability of the economy.
C
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Long-run macroeconomic policies concentrate on:
A) minimizing fluctuations around potential GDP. B) maximizing fluctuations around potential GDP. C) incentives for increasing productivity and the potential output of the economy. D) none of the above.
Rhonda sells a house she has owned for 15 years and starts living in a rented apartment. To make it more marketable, she buys carpeting that she has professionally installed and buys wallpaper that her daughter hangs. Which items would be included in this year's gross domestic product (GDP)?
a. The sale price of the house b. The cost of transporting all her furnitures to the new apartment c. The opportunity cost of Rhonda's daughter's time d. The opportunity cost of Rhonda's time e. The purchase price for carpet and wallpaper, and the installation fee for the carpet
In which of the following instances is the present value of the future payment the largest?
a. You will receive $1,000 in 5 years and the annual interest rate is 5 percent. b. You will receive $1,000 in 10 years and the annual interest rate is 3 percent. c. You will receive $2,000 in 10 years and the annual interest rate is 10 percent. d. You will receive $2,400 in 15 years and the annual interest rate is 8 percent.
If the GDP gap is -$3.5 trillion, then
A. workers are employed overtime. B. the economy is experiencing a boom. C. the economy is in a recession. D. cyclical unemployment is negative.