Exam 6: An Introduction to Macroeconomics

What is the difference between nominal and real GDP?

What is GDP per capita?

Suppose that we are in a condition of fully flexible prices,but production of nails will not go above 200 chairs/month.What price will chairs sell for if market demand is characterized by: (a)P = 425 - 1.5Q, (b)P = 530 - 1.5Q,and (c)P = 400 - 0.5Q,where P is in $/chair and Q is in chairs/month?

What three key statistics do macroeconomists study to assess the health of the economy? Give a short explanation of each.

In order to grow,what must a country do?

Suppose that we are in a condition of "stuck" prices so that the price of nails will not go above or below $2/kg.Further suppose that nail factories have been built on a business plan designed to deliver 6,000 kg/week.How many nails will be sold in a market in which demand (which includes a modest amount of inventory)is characterized by: (a)P = 5 - 0.5Q, (b)P = 6 - 0.5Q,and (c)P = 4 - 0.5Q,where P is in $/kg and Q is in thousands of kg/week? In each case,what happens to inventory.

If households are typically the source of savings and businesses the source of investments,how then are savings and investments coordinated?

If prices are "stuck" and there is an unexpected demand decrease,describe what happens in the economy.

What is the difference between financial investment and economic investment?