The intertemporal tradeoff between present and future consumption is measured by the
A) real interest rate.
B) inflation rate.
C) nominal interest rate.
D) terms of trade.
E) rate of economic growth.
A
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The significant difference between adverse selection problems and moral hazard problems is
a. that adverse selection refers to bad luck, moral hazard refers to bad behaviors. b. that adverse selection applies to markets for goods, moral hazard applies to markets for services. c. only identifiable after an action has been taken. d. that in adverse selection one group of people starts out at a higher risk, while in moral hazard problems, people incur additional risks.
A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real Gross Domestic Product (GDP) of
A) $800. B) $25. C) $400. D) $100.
The European Commission believes that in 2016 exports of goods and services from Spain will be 22 times larger than in 2013. Irish exports are expected to have grown by 15 percent over the same period. If imports remain constant
A) the current account balance in both countries will become more positive. B) the current account balance in both countries will become more negative. C) there will be no change in the current account balance of both countries. D) in both countries the capital and financial account balance will become more positive.
Between 2015 and 2016, the CPI of a small nation rose from 182 to 185. If household incomes rose by 3% during that period of time, which of the following is true?
A) The purchasing power of household income remained constant between 2015 and 2016. B) The purchasing power of household income rose between 2015 and 2016. C) The purchasing power of household income fell between 2015 and 2016. D) The CPI cannot be used to determine how the purchasing power of household income changes over time.