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Suppose that lenders want to receive a real rate of interest of 5 percent, and that they expect inflation to remain steady at 2 percent
Suppose that lenders want to receive a real rate of interest of 5 percent, and that they expect inflation to remain steady at 2 percent in the coming years. Based on this, lenders should charge a nominal interest rate of: a. 2 percent. b. 3 percent. c. 5 percent. d. 7 percent. Which the following is the best measure of improvements in the standard of living of a nation? Growth of: a. national income b. labor productivity c. real GDP d. real GDP per capita Which of the following is the single most important source of U.S. economic growth? A. Stability of the social and political environment b. Increase in the quantity of labor hours c. Increase in labor productivity d. Increase in natural resources Suppose a report from the Bureau of Labor Statistics states that the Consumer Price Index (CPI) for the year 2012 was 160. What is the percentage increase in the prices of goods and services since the base period (Base Period: 1982-84 = 100)? a. 40 percent b. 60 percent c 160 percent d. 260 percent Economic growth is higher in countries that have a. economic freedom. b. wide-spread corruption. c. weak property rights that are not enforced. d. poorly functioning legal systems. A short-cut formula suggests that the per person (per capita) real GDP growth rate equals the growth rate of real GDP minus the population growth rate. Assume the population growth rate is 2 percent and the growth rate of real GDP is 5 percent, then the change in per person real GDP (which represents the change in standard of living) must be: a 2.5 percent b. 3 percent. c 5 percent d. 7 percent
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