To prevent inflation caused by holding so much foreign currency, China must
A. Allow a floating yuan to cause it to appreciate.
B. Allow the dollar to float.
C. Allow the yuan to float with supply and demand and cause it to depreciate.
D. Fix its exchange rate lower.
Answer: A
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Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment will
a. increase U.S. GNP more than it increases U.S. GDP. b. increase U.S. GDP more than it increases U.S. GNP. c. have no affect on U.S. GNP, but will increase U.S. GDP. d. have no affect on U.S. GNP or GDP.
At $2 a container, a grocery store supplies 100 containers of organic yogurt, but sells only 72 containers of this product. The grocery store has a ______.
a. shortage of 28 b. shortage of 18 c. surplus of 28 d. surplus of 18
What term is defined as the change in the amount consumers will buy because they can buy a different product instead?
a. inferior goods b. normal goods c. income effect d. substitution effect
In August of this year, Jack can best estimate the current year's GDP by:
A. multiplying the most recent quarter's GDP estimate by four. B. adjusting the first two quarterly estimates of GDP for seasonal variation. C. taking an average of the last four quarterly estimates of GDP available. D. looking back at previous years GDP in order to make an accurate projection.