If the MPC = 0.8, and planned autonomous investment increases by $80 billion, then equilibrium real GDP will increase by
A) $320 billion. B) $80 billion. C) $400 billion. D) $64 billion.
C
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Velocity of money is the ratio of ________
A) real GDP to money demand B) money supply to money demand C) nominal GDP to money supply D) nominal GDP to money demand
If the nominal GDP of a country increases by 25 percent in 5 years but real GDP remains more or less stable, it implies that the growth in nominal GDP was due to an increase in _____
a. total fiscal spending b. the rate of investment c. the amount of exports d. the rate of inflation
Suppose that opportunity costs are constant in both France and Germany. In France, maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine. In Germany, maximum feasible hourly production levels are either 4 units of wheat
or 10 units of wine. It is correct to state that A) Germany has an comparative advantage in producing both wheat and wine. B) Germany has a comparative advantage in producing wine. C) France has a comparative advantage in producing both wheat and wine. D) France has a comparative advantage in producing wine.
What insights about international trade came from Adam Smith and David Ricardo?
What will be an ideal response?