Which of the following is true of the rule of 72?
a. The rule of 72 is used to approximate annual real GDP.
b. The rule of 72 determines the time required for any value to double if it grows at a constant annual rate.
c. The rule of 72 is used to calculate the number of years it takes for any quantity to treble in size.
d. The rule of 72 refers to the fact that real GDP doubles every 6 years.
e. The rule of 72 refers to the fact that capital growth has consistently contributed 72 percent to the U.S. real GDP.
b
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If you want to know the present value of $4,000 in two years and the annual interest rate is 5%, what formula can you use?
A) Present value = $4,000 / (0.05 ) × 2. B) Present value = $4,000 / (1 + 0.05 )2. C) Present value = $4,000 × (1 + 0.05 )2. D) Present value = $4,000 × (1 + 0.05 )/ 2.
Aggregate demand is the:
A. Total quantity of output demanded at alternative price levels. B. Total quantity of output demanded but only at full employment. C. Quantity of goods demanded by the largest corporations in the country. D. Quantity of new goods and services produced.
If the equilibrium exchange rate between U.S. dollars and Japanese yen is $0.01 = 1 yen, but currently the exchange rate is $0.009 = 1 yen, then with flexible exchange rates the dollar price of a yen will __________ and the yen will __________
A) increase; appreciate B) decrease; appreciate C) increase; depreciate D) decrease; depreciate
When actual output exceeds potential output there is ________ output gap and the rate of inflation will tend to ________.
A. no; remain the same B. an expansionary; decrease C. an expansionary; increase D. a recessionary; increase