Assume that M is $250 billion and V is 8. If V increases by 15%, what will be the change in nominal GDP?
What will be an ideal response?
The nominal GDP should rise by 15%. The arithmetic is as follows: Original GDP = $2000 billion; after V rises to 9.2, GDP = $2300 billion.
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Suppose a social entrepreneur needs to raise money for a public good. He has to allocate his fund raising package to activities that persuade people of the importance of the public good and to activities that make people feel good about giving. As the population gets large, which of these do you think he will increasingly emphasize?
What will be an ideal response?
An increase in government expenditure on goods and services
A) increases aggregate demand. B) increases the aggregate quantity demanded. C) decreases the aggregate quantity demanded. D) decreases aggregate demand.
In 2010, the highest quin tile of the income distribution earned approximately
a. 5 percent of aggregate income. b. 10 percent of aggregate income. c. 15 percent of aggregate income. d. 50 percent of aggregate income.
A country has national saving of $50 billion, government expenditures of $30 billion, domestic investment of $10 billion, and net capital outflow of $40 billion. What is its supply of loanable funds?
a. $20 billion b. $30 billion c. $50 billion d. $60 billion