What is the difference between savings and investment?
What will be an ideal response?
Investment refers to the purchase of capital by firms and residential structures by households. Savings refers to postponing consumption by providing loanable funds.
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What is larger: M1 or M2? Why?
What will be an ideal response?
Suppose the price level increases and real GDP remains the same. Then
A) nominal GDP must decrease. B) nominal GDP must remain unchanged. C) nominal GDP must increase. D) none of the above are true.
Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two
goods will be A) a straight, downward-sloping line. B) a straight, upward-sloping line. C) bowed outward. D) All of the above are possible and more information is needed to determine which answer is correct.
Net entrants to the labor force is likely to be highest when the economy ________
A) is entering a recession B) nears the peak of an expansion C) has passed the peak of an expansion D) begins to recover from a recession