Suppose that a nation has a GDP of 1.0 trillion dollars in 2000. If a country grows at an average rate of 3.0 % per year over a fifteen year period, then its compounded GDP at the end of the 15 year period should be:
A. 1.47 Tr.
B. 2.00 Tr.
C. 1.33 Tr.
D. 1.56 Tr.
D. 1.56 Tr.
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Describe, in general terms, the strategy of monetary policy, explaining how monetary-policy tools are used to achieve the goals of monetary policy
What intermediate stages are important in going from tools to goals? What are the links between the different stages? How does the Federal Reserve use this strategy today?
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
A. an increase in both prices and output in the short run. B. a decrease in prices only in the long run; output will remain the same. C. a decrease in both prices and output in the short run. D. an increase in output only in the long run; prices will remain the same.
If more people think a corporation's stock is overvalued than think it is undervalued then there is a
a. surplus, so its price will rise. b. surplus, so its price will fall. c. shortage, so its price will rise. d. shortage, so its price will fall.
The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored. B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation. C. it fails because it should take effect immediately, not after four years. D. it is a good decision because the benefits exceed the costs.