Consider the following statement: "Real GDP and potential GDP are always equal." Is this statement true or false? Explain your answer
What will be an ideal response?
Real GDP often differs from potential GDP. Real GDP equals potential GDP only when the economy is at full employment. However, the economy is not always at full employment. When employment is less than full employment, real GDP is less than potential GDP and the economy is in a recession. When employment exceeds full employment, real GDP exceeds potential GDP and the economy is in an expansion.
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An economic model includes
A) only normative statements. B) no use of marginal concepts. C) all known details in order to increase its accuracy. D) only details considered essential.
If a CEO can type faster than her secretary, then
A) the CEO has a comparative advantage in typing. B) the CEO has neither a comparative advantage in typing, nor in management. C) the CEO should still continue performing CEO duties since the CEO has a comparative advantage in management, and the secretary should continue typing. D) the CEO should still continue performing CEO duties as well as typing since he has a comparative advantage in both management, and typing.
Fundamental analysis shows that stock in Widgets-R-Us has a present value that is lower than its price
a. This stock is overvalued; you should consider adding it to your portfolio. b. This stock is overvalued; you shouldn't consider adding it to your portfolio. c. This stock is undervalued; you should consider adding it to your portfolio. d. This stock is undervalued; you shouldn't consider adding it to your portfolio.
Does the Fed pay interest on required reserves and excess reserve balances held at the Federal Reserve bank?
What will be an ideal response?