When people's incomes increase, the demand for a good increases. The good is called
A) an inferior good.
B) a complement.
C) a substitute.
D) a normal good.
D
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The reduction in private borrowing that is caused by an increase in government borrowing is called:
A. the crowding out effect. B. surplus investment. C. the dissaving effect. D. the savings effect.
Discuss the problems with GDP as a measure of a country's current production and income
Real income per person was the same until:
A. the 1800s, when the Industrial Revolution caused it to grow. B. Real income per person has been roughly the same for the last three centuries. C. the 1900s, when wireless technology caused it to grow. D. the 1500s, when the Renaissance caused it to grow.
Under which one of the following situations would you be better off?
A) You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B) You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. C) You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. D) You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.