Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much more will be in your account if the interest rate is 6 percent rather than 4 percent?
A. $2,390
B. $5,617
C. $880
D. $7,369
Answer: D
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If households save $0.20 of each additional dollar of increased income and spend the rest, the expenditure multiplier will be
A) 1.25. B) 2. C) 5. D) 8.
Advantages of specialization do not include: a. reduced interdependence
b. the exploitation of comparative advantage. c. the ability to utilize more complex production processes. d. Productivity gains from learning by doing.
Which of the following is not correct?
A. Where marginal product is greater than average product, average product is rising. B. Where total product is at a maximum, average product is also at a maximum. C. Where marginal product is zero, total product is at a maximum. D. Marginal product becomes negative before average product becomes negative.
The war in Iraq comes to an end. Iran and Afghanistan lay pipes to generate more oil. The United States and Venezuela enter into an era of friendship. Which of the following correctly captures the effect of this change on the market for gasoline?
A. Both equilibrium quantity and price will increase. B. Both equilibrium quantity and price will decrease. C. Equilibrium quantity will decrease, but equilibrium price will increase. D. Equilibrium quantity will increase, but equilibrium price will decrease.