If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent, the economy is
a. not achieving full economic potential
b. experiencing an increase of 2 percent in real annual per capita GDP
c. experiencing a slump
d. experiencing high prices and low inflation
e. producing along its production possibilities frontier
A
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If the expectations theory of the term structure is correct, would a reduction in the supply of thirty-year Treasury bonds affect their yields?
What will be an ideal response?
If the world real interest rate were to fall below the rate at which domestic saving and investment would be equal ________
A) saving would be greater than investment so the economy would be running a trade deficit B) investment would be greater than saving so the economy would be running a trade deficit C) investment would be greater than saving so the economy would be running a trade surplus D) saving would be greater than investment so the economy would be running a trade surplus E) none of the above