If potential output equals 8,000 and short-run equilibrium output equals 8,500, there is a(n) ________ gap and the Federal Reserve must ________ real interest rates in order to close the gap.
A. expansionary; raise
B. recessionary; raise
C. recessionary; not change
D. recessionary; reduce
Answer: A
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If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except
A) more film makers will choose to do business in that country. B) more software companies will choose to export their products to that country. C) foreign investment in that country will increase. D) the black market for intellectual property will become more prosperous in that country.
The national debt is the
a. result of previous budget deficits. b. result of rising interest rates. c. result of previous budget surpluses. d. result of efficient balancing.
Gross domestic product is a measure of both
a. the market value of a nation's capital assets (physical capital) and the costs that were incurred producing those assets. b. the expenditures on and sales revenues derived from all goods and services exchanged during a period. c. the market value of the output produced during a period and the cost of producing that output. d. the asset holdings of people and the happiness that they derived from the ownership of those assets.
An individual is currently 30 years old, wants to work until the age of 65 and plans on dying at the age of 85. How much will the individual need to have saved by the time he or she is 65 if he or she plans on spending $40,000 per year while retired? You can assume the individual can earn an interest rate of 5.0% and the $40,000 is in addition to any Social Security that may be received.
What will be an ideal response?