Economic growth is generally measured as the percentage increase in a country's
A) real GDP.
B) nominal GDP.
C) annual employment rate.
D) per-capita nominal GDP.
A
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Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?
A) Is the intervention program economically efficient? B) Does the intervention program reduce pollution to zero? C) Does the intervention program maximize economic surplus? D) Does the intervention program minimize environmental damage?
The Federal Reserve System consists of
A) one Federal Reserve Bank and 12 Federal Reserve districts, each with one branch bank. B) a main central bank located in New York, with 11 additional branch banks located across the country. C) 12 Federal Reserve Banks, each of which have a degree of independence from the U.S. government. D) 12 independent banks in the 12 Federal Reserve districts, each of which are owned and controlled by the federal government.
Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 12 percent:
a. neither the borrower nor the lender benefits from inflation.
b. both the borrower and the lender lose from inflation.
c. the borrower benefits from inflation, while the lender loses from inflation.
d. the lender benefits from inflation, while the borrower loses from inflation.
When we calculate GDP, government spending on goods and services makes up approximately
A. One-fifth of total output. B. One-tenth of total output. C. One-half of total output. D. One-third of total output.