Use the following graph to answer the next question.
If this economy was an open economy without a government sector, the level of real GDP would be
A. $300 billion.
B. $200 billion.
C. $100 billion.
D. $400 billion.
Answer: A
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A firm has to decide between two projects that cost $10,000 each. Project A will provide a revenue $10,700 one year from now, while Project B will provide a revenue of $12,200 two years from now. The interest rate is 10% per year. This firm
A) chooses project A. B) chooses project B. C) rejects both projects. D) is indifferent between projects A and B.
The federal government has major assistance programs aimed at providing all of the following goods, except one. Which is the exception?
a. housing b. energy c. school lunches d. clothing e. food
Normative economics involves
A) a statement of fact. B) a statement of "what should be." C) a statement of "what is." D) a statement that is purely descriptive.
Compared with money, bonds have
A. more risk and less liquidity. B. more risk and more liquidity. C. less risk and more liquidity. D. less risk and less liquidity.