If nominal GDP is $800 billion and, on average, each dollar is spent four times in the economy over a year, then the quantity of money demanded for transactions purposes will be:
A. $200 billion
B. $400 billion
C. $800 billion
D. $3,200 billion
A. $200 billion
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Assume that the professors at a local college have gone without a pay increase for 4 years during a tough time. Suppose that things start to look up and the President of the college wants to make up for lost time. If the CPI in 2002 was 150 and 175 in 2006, how much will salaries have to increase to bring the faculty back up to their real income from 2002?
a. 175.0% b. 150.0% c. 25.0% d. 16.7% e. 14.3%
The marginal propensity to consume (MPC) is calculated by which formula?
a. MPC = change in DI divided by change in C b. MPC = change in GDP divided by change in DI c. MPC = change in C divided by change in DI d. MPC = change in C divided by change in GDP
Refer to the accompanying figure. The opportunity cost of increasing medical care from 200 to 400 units is ________ the opportunity cost of increasing medical care from 400 to 600 units.
A. less than B. exactly the same as C. twice as much as D. greater than
To the economist, total cost includes:
A. explicit and implicit costs, including a normal profit. B. implicit, but not explicit, costs. C. neither implicit nor explicit costs. D. explicit, but not implicit, costs.