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Faradia is a closed economy who’s national saving (NS) and investment (I) are given by the following equations:
where r is the real interest rate.
Suppose the government of Faradia increases the budget surplus by 5. Which of the following effects will occur?
A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. This individual is:
Which of the following would NOT be included in Australia's GDP?
Which of the following statements about structurally unemployed job seekers is true?
Crowding out is the tendency for increased government deficits to:
In a two-sector economy the aggregate household saving function is given by S=-80+0.5Y and planned investment is 120. If autonomous saving by households increases by 20, what is the effect on equilibrium output?
The following table shows the investment and output options for an individual business. Employment of labour and technology is assumed to be constant.
Capital stock (Number of machines) | Output (Number of units) |
0 |
|
1 | 5 |
2 | 9 |
3 | 12 |
4 | 13 |
The business operates in competitive product and factor markets. Its output sells for $100. The price of a new machine is $4,000, the nominal interest rate is 10%, inflation is 2%, and the depreciation rate is 1%. How many machines will the business choose to invest in? Use decimals for inflation, interest rates and the depreciation rate when calculating the user cost of capital.
In Macroland, potential GDP equals $20.8 billion and real GDP equals $20 billion. Macroland has a _________ gap equal to _____ % of potential GDP.
According to Okun's law, when cyclical unemployment is positive, then the output gap:
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