Suppose Real GDP Increases by $1 Billion And, as a Result

question 140

Multiple Choice

Suppose real GDP increases by $1 billion and, as a result, consumption increases by $500 million.This change in consumption is

• A)unplanned.
• B)planned.
• C)too little.
• D)autonomous.
• E)induced.

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Definitions:

Eurobond

A bond issued in a currency other than the currency of the country or market in which it is issued.

International Bond

A debt investment that is issued in a country by a non-domestic entity, potentially denominated in a foreign currency, and sold to investors from around the world.

Purchasing Power Parity

Purchasing power parity is an economic theory that compares different countries' currencies through a "basket of goods" approach, assuming that exchange rates should adjust so that identical goods cost the same in different countries.

Exchange Rate

The price of one country's currency expressed in terms of another country's currency, facilitating international trade and finance.