The following data give the dates of successive turning points in U.S. economic activity and the corresponding levels of real GDP at the time.Turning PointDateReal GDP(1996 $ billions) (A)July 19531992.2(B)May 19541941.0(C)Apr. 19572182.7(D)Apr. 19582117.4(E)Apr. 19602391.0The economy experienced an expansion that lasted from:
A. May 1954 to April 1958.
B. July 1953 to May 1954.
C. July 1953 to April 1957.
D. May 1954 to April 1957.
Answer: D
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If an economy produces 3 million oranges that sell for $0.25 each and 100,000 cars that sell for $25,000 each, then when the market value of total output is calculated:
A. oranges receive a smaller weight than cars. B. oranges receive the same weight as cars. C. oranges receive a greater weight than cars. D. the market value of oranges is excluded.
You are the owner of a rare bottle of wine valued at $332. There are no costs associated with storing or selling the wine. Next year you expect the wine to increase in value to $350. If the interest rate is 10 percent
A) you should sell the wine today. B) you should keep the wine for at least one more year. C) you are indifferent between selling the wine today and holding it for one more year. D) more information is needed to answer this question.
Suppose the U.S. dollar is defined by law as being equal to 0.1 ounce of gold. Further suppose the British pound is defined as being equal to 0.05 ounce of gold. The implied exchange rate between the pound and the dollar is
A. A fixed rate at which $1 = 2 pounds. B. A flexible rate at which $2 = 1 pound. C. A fixed rate at which $2 = 1 pound. D. A flexible rate at which $1 = 2 pounds.
When considering the aggregate demand curve, the wealth effect, interest rate effect and international trade effect reinforce each other.
Answer the following statement true (T) or false (F)