In a certain economy, the components of aggregate spending are given by:C = 100 + 0.9(Y - T) - 500rI = 150 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, what is the short-run equilibrium output if the real interest rate is 4 percent?
A. 3,800
B. 350
C. 410
D. 3,500
Answer: D
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A) it translates into higher investment B) severe economic downturns can be "better-weathered" C) it provides a cushion to avoid bankruptcies D) all of the above E) none of the above
What is one reason the federal government might "bail out" farmers in flood prone areas of the country?
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Reducing class size will
A. improve student test scores. B. decrease student test scores. C. have no impact on student test scores. D. have an undetermined impact on test scores.
The value of final output produced in a given period, measured in current prices, is
A. GNP. B. Real GDP. C. Nominal GDP. D. NDP.