Answer the following statements true (T) or false (F)
1) In 2008-2009, the U.S. economy lost 8 million jobs and saw the unemployment rate rise from
4.6 percent to as high as 10.1 percent.
2) Real GDP measures the change in the price level over time.
3) Modern economic growth refers to any situation where a nation's output increases.
4) In order to achieve modern economic growth, a nation's output must grow faster than its
population.
1) T
2) F
3) F
4) T
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Suppose Always There Wireless serves 100 high-demand wireless consumers, who each have a monthly demand curve for wireless minutes of QdH = 200 - 100P, and 300 low-demand consumers, who each have a monthly demand curve for wireless minutes of QdL = 100 - 100P, where P is the per-minute price in dollars. The marginal cost is $0.25 per minute. Suppose Always There Wireless charges $0.35 per minute. If Always There Wireless charges the highest fixed fee that it can without losing the low-demand consumers, what is Always There Wireless's profit from sales for each high-demand consumer?
A. $27.63 B. $37.63 C. $21.13 D. $28.13
If the demand for money is insensitive to the interest rate, then the most effective expansionary policy would be
A. fiscal policy. B. monetary policy. C. neither fiscal nor monetary policy. D. both fiscal and monetary policy.
If the MPS = .25, and investment falls from $100 to $75, real GDP will decrease by:
a. $25. b. $75. c. $150. d. $125. e. $100.
Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. To invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and borrowed $30,000 from his uncle, whom he pays 3 percent interest per year. Last year Walter paid $25,000 for supplies and had revenue of $60,000 . Walter asked Tyler the
accountant and Greg the economist to calculate his painting business's costs. a. Tyler says his costs are $25,900, and Greg says his costs are $66,500. b. Tyler says his costs are $25,000 . and Greg says his costs are $65,000. c. Tyler says his costs are $66,500, and Greg says his costs are $66,500. d. Tyler says his costs are $75,000 . and Greg says his costs are $41,500.