Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that
A. economic well being is the same in both countries.
B. living standards may differ in the two countries because we don't know how income is distributed in the countries.
C. living standards in the two countries are probably identical, or very close to each other.
D. life expectancies are the same in both countries.
Answer: B
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Which statement is true?
A. On the production possibilities frontier, 85 percent of capital is employed. B. If we moved closer to the origin and further away from the production possibilities frontier, unemployment would increase. C. To have economic growth, we must push the production possibilities frontier outward. D. All of the statements are true.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Refer to Figure 10-6. A change in the price of candy only is shown in
A) Panel A. B) Panel B. C) Panel C. D) none of the above panels.
For simple loans, the simple interest rate is ________ the yield to maturity
A) greater than B) less than C) equal to D) not comparable to