Consider two countries, Alpha and Beta. In Alpha, real GDP per capita is $6,000. In Beta, real GDP per capita is $9,000
Based on the economic growth model, what would you predict about the growth rates in real GDP per capita across these two countries?
A) The growth rate of real GDP per capita in Alpha and Beta will be the same.
B) The growth rate of real GDP per capita will be higher in Alpha than it is in Beta.
C) The growth rate of real GDP per capita will be lower in Alpha than it is in Beta.
D) The economic growth model makes no predictions regarding differences in growth rates of real GDP per capita across the two countries.
B
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Which of the following will limit the expansion of the money supply following a new deposit?
A) a re-depositing of all loan proceeds B) a strong demand for holding currency outside of commercial banks C) a strong demand for new loans D) failure of banks to voluntarily hold excess reserves
The law of one price should hold well for
A) differentiated products. B) any individual goods traded internationally. C) homogeneous goods. D) All of the above.
Given an initial deposit of $5,000 and a legal reserve requirement of 25%, the amount of money potentially created by the banking system is
a. $15,000 b. $20,000 c. $25,000 d. $10,000 e. $30,000
Venture capital increases the pace of innovation.
Answer the following statement true (T) or false (F)