When making historical comparison's of one's income, is it better to use real income or nominal income for the basis of your comparison? Explain why one makes a better comparison than the other
Real income should be used when making historical comparisons. This is because nominal income can change as a result of changes in the price level, while a change in real income reflects a change in purchasing power.
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Describe R&D expenditures in the United States. What percentage of spending goes for invention, innovation, and diffusion?
What will be an ideal response?
Prescott's calibrated RBC model was able to match the data in terms of the ________ between many key macroeconomic variables and GNP; that is, in terms of how closely they moved with GNP over the business cycle.
A. interdependence B. sigma ratio C. correlation D. gamma coefficient
________ can be altered to change the lending capacity of the banking system.
A. Points charged on a typical first mortgage B. The reserve requirement C. The dollar exchange rate D. Gold reserves
The graph above shows the relationship between consumption and income. Which of the following statements is correct?
A. The marginal propensity to consume in the economy shown is greater than 1
B. The marginal propensity to consume varies across income levels
C. The average propensity to consume at income level K is given by KM divided by KN
D. The marginal propensity to consume can be calculated by dividing LM by 0K