A nation's standard of living:
a. will increase substantially over time even for a small increase in the growth rate.
b. will increase by the same amount as the increase in the growth rate
c. will decrease substantially over time even for a small increase in the growth rate.
d. will increase less than the amount of the increase in the growth rate.
a
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"The marginal utility received from each additional unit of a good consumed declines, other things constant." This is a statement of the law of
a. increasing marginal returns b. marginal rate of substitution c. supply d. diminishing marginal utility e. demand
Economists believed that the U.S. economy had a (n) ____ in 2006 and 2007
a. mild recession b. small recessionary gap c. small inflationary gap d. deflationary gap
Suppose a bank in Germany borrows $2 million U.S at an interest rate of 5%. The bank then converts the amount into euros, the local currency, at a rate of 2 euros per dollar. It lends the €4 million at an interest rate of 15% to other firms. After one year, the loan is repaid with interest, and the bank receives €4.6 million. The bank now wants to pay back the debt. If the current exchange
rate is 3 euros per dollar, the bank will: a. face a loss of $570,000 approximately. b. face a loss of $470,000 approximately. c. make a profit of $500,000 approximately. d. make a profit of $320,000 approximately.
The product approach to calculating GDP
A. adds together the market values of final goods and services produced by domestic and foreign-owned factors of production within the nation in some time period. B. is superior to the income approach because, unlike the income approach, it gives us the real value of output. C. includes the market value of goods and services produced by households for their own consumption but excludes the value of the underground economy. D. adds together the market values of final goods, intermediate goods, and goods added to inventories.