Consider an economy where the money supply is growing at 7 per cent per year and velocity is constant. Which of the following statements about real GDP growth and the inflation rate could be TRUE if the Quantity Theory of Money holds?
A. Real GDP is growing at 2 per cent and inflation is 5 per cent.
B. Real GDP is growing at 7 per cent and inflation is 7 per cent.
C. Real GDP is growing at 2 per cent and inflation is 9 per cent.
D. Real GDP is growing at 9 per cent and inflation is 2 per cent.
Ans: A. Real GDP is growing at 2 per cent and inflation is 5 per cent.
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Refer to the table below. ________ has the comparative advantage in making pizza, and ________ has the comparative advantage in delivering pizza. Pizzas MadePer HourPizzasDeliveredPer HourCorey126Pat1015
A. Pat; Pat B. Corey; Pat C. Pat; Corey D. Corey; Corey
________ in the United States ________ in most European countries
A) GDP per hour; is greater than GDP per hour B) Average weekly hours; are greater than average weekly hours C) The Okun Gap; is equal to the Okun Gap D) The Lucas Wedge; is greater than the Lucas Wedge E) Both A and B are true.
An investor has to choose between stocks A&B, each selling for $10 . Stock A, can either increase in price to $12, with a 50% probability or stay at $10 with a 50% probability. Stock B can either increase in price to $15 with a 50% probability or go down to $7 with a 50% probability. Which of the stocks would the investor choose
a. Stock A b. Stock B c. None of the stocks d. The investor would exit the market
As production of a good increases, opportunity costs rise because:
a. there will be more inefficiency. b. people always prefer having more goods. c. of inflationary pressures. d. workers are not equally suited to all tasks.