The father of general equilibrium theory is considered to be:
A. Kenneth Arrow.
B. Gerard Debreu.
C. Leon Walras.
D. John Nash.
C. Leon Walras.
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Are all categories of government expenditures included in gross domestic product? What government activities are not included in GDP?
What will be an ideal response?
Figure 9-4
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In Figure 9-4, which expenditure level will result in a recessionary gap?
A. 1 B. 2 C. 3 D. There will be no deflationary gap.
Recall the Application about the effect of global warming on economic growth to answer the following question(s). According to this Application, a study of municipalities in Latin and South America found that a one degree Celsius rise in temperature was associated with:
A. no measurable change in per capita income. B. a small decline in real income and a small increase in per capita real income. C. a slight increase in municipal per capita income. D. a decline in municipal per capita income.
The ABC Corporation earned a real rate return of 4.5 percent on an investment. In the economy, the nominal rate of interest was 6 percent and the rate of inflation was 3 percent. We can conclude that
A. the investment was profitable. B. the investment was unprofitable. C. the real rate of interest was 9 percent. D. the real rate of interest was 1.5 percent.