Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today). Of the following, which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?
a. 2%
b. 5%
c. 7%
d. 10%
a
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called
A) commodity markets. B) fund-available markets. C) derivative exchange markets. D) financial markets.
All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level
a. True b. False Indicate whether the statement is true or false
Suppose that the government decreases its purchases of goods and services. Within the AD-AS model, the result will be ________ in real GDP and ________ in the price level.
A) a decrease; a decrease B) an increase; a decrease C) a decrease; an increase D) an increase; an increase