Economic growth entails an increase in the rate of production of
A) material goods.
B) services.
C) the money supply.
D) wealth.
D
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A bond has a current market value of $800. The holder of the bond will receive a single payment of $1,000 one year from now. The interest rate is 10 percent. The effective yield on the bond is:
A) $200. B) 10 percent. C) 25 percent. D) negative. E) The yield cannot be determined with the information provided.
Lower nominal interest rates ________ the amount of money demanded and lower real income ________ the amount of money demanded.
A. increase; increases B. increase; does not change C. decrease; decreases D. increase; decreases
Which of the following would be associated with an inflationary gap?
A. Interest rates too low B. Business expectations pessimistic C. Inventory levels too low D. Stock market crash E. Inventory levels are too high
Related to the Economics in Practice on page 221: Because land is demand determined, an acre of land in downtown Harlingen, Texas ________ an acre of land in downtown Chicago, Illinois.
A. would cost exactly the same as B. would most likely cost less than C. would most likely cost more than D. should cost approximately the same as