Discuss the relationship between world trade and world Gross Domestic Product (GDP) since the early 1950s
What will be an ideal response?
Both world trade and world GDP have grown substantially since the early 1950s, but trade has grown much more than has GDP. Both imports and exports as a percent of GDP have increased for the United States as well.
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When the interest rate is so low that the opportunity cost of holding money is zero, then economists say we have reached:
A) the era of total liquidity. B) the zero lower bound situation, which means the U.S. economy may be in a liquidity trap. C) full monetary saturation. D) a situation in which a nation must use caution, since monetary policy is "super" effective.
The rate of return that owners of capital must receive in order to induce them to continue supplying the capital is often referred to as
a. accounting profit. b. the normal or market rate of return. c. economic profit. d. the accounting rate of return.