If the size of the capital stock in an economy is stationary, ________.
A. gross investment is zero
B. GDP is zero
C. net investment is zero
D. capital consumption (or depreciation) is zero
Answer: C
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A decrease in expected inflation shifts
a. the long-run Phillips curve left. b. the short-run Phillips curve left. c. neither the short-run nor long-run Phillips curve left. d. both the short-run and long-run Phillips curve left.
Real money balances
A. refer to the amounts of nominal money that individuals hold. B. are computed by deflating nominal money assets by the average price level. C. refer to the amounts of American money that an individual holds relative to gold or foreign currencies. D. are measured by currency holdings rather than holdings in checking accounts.
The graph above shows the PPC for a country that can produce oil, which is labor intensive, or televisions, which are capital intensive. The country is currently producing at point A and not trading with the rest of the world. With trade, the world price can be represented by slope of the straight line through Point A. Which of the following is a true statement?
A) When this country produces the optimal amount with trade, workers in this country will be better off. B) When this country produces the optimal amount with trade, capital in this country will be better off. C) When this country produces the optimal amount with trade, both factors of production will be better off. D) When this country produces the optimal amount with trade, the income of factors of production will not change.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases B. remains constant. C. initially increases, then decreases. D. decreases.