Ceteris paribus, which of the following situations would result in the largest quantity of money demanded?
a. When nominal GDP = $1.4 trillion and the interest rate is 3 percent.
b. When nominal GDP = $1.4 trillion and the interest rate is 6 percent.
c. When nominal GDP = $1.2 trillion and the interest rate is 5 percent.
d. When nominal GDP = $800 billion and the interest rate is 4 percent.
a
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Which of the following statements is correct?
A. Economic profits induce firms to enter an industry; losses encourage firms to leave. B. Economic profits induce firms to leave an industry; profits encourage firms to leave. C. Economic profits and losses have no significant impact on the growth or decline of an industry. D. Normal profits will cause an industry to expand.
Use the following table to answer the next question. All figures in the table below are in billions of dollars.RGDPAggregate Expenditures (Closed Economy - No International Trade)ExportsImports$400$440$50$60450480506050052050605505605060600600506065064050607006805060If this economy were closed to international trade, then the equilibrium real GDP would be ________ billion and the multiplier would be ________.
A. $600;5 B. $600;4 C. $500;5 D. $500;4