Country A and country B initially have the same per capita income. Suppose that A sustains an annual growth rate of 3.5 percent, while the annual growth rate of country B is 1.75 percent. The "rule of 70" indicates that after forty years, the per capita income of country A will be approximately ____ that of country B
a. one-half
b. 70 percent greater than
c. twice
d. four times
C
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In an open economy with few capital restrictions and substantial import-export trade, a rise in interest rates and a decline in the producer price index of inflation will
a. raise the value of the currency b. lower the nominal interest rate c. increase the volume of trading in the foreign exchange market d. lower the trade-weighted exchange rate e. increase consumer inflation.
The confidence you have that a retailer will accept dollars in exchange for goods is based primarily on money
a. being a unit of account. b. being a medium of exchange. c. serving as a store of value. d. having intrinsic value.
All of the following are ways a government might protect monopoly rights except:
A. making it illegal to enter an industry. B. heavy taxation of potential competitors. C. protecting intellectual property rights. D. subsidizing a state-owned entity.
One of the problems that monetary unions eliminate is
A. inflationary gaps. B. recessionary gaps. C. exchange rate instability. D. business cycles.