If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?
a. $6.7 billion.
b. $15 billion.
c. $21.6 billion.
d. $38 billion.
b
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Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
A. shift into producing good Y. B. anticipate a price increase for good X. C. intensify its production of good X. D. charge a higher price for good X.
Physical resource
What will be an ideal response?
A factory produces 1,000 radios a year, AVC = $10 and TFC = $5,000. The factory’s TC
A. equals $15. B. equals $5,005. C. equals $15,000. D. cannot be determined from the information given.
When demand for money is unstable,
A) a constant interest-rate policy will be superior to a policy of constant money-supply growth. B) constant money-supply growth will be superior to a countercyclical monetary policy. C) procyclical monetary policy would be needed to keep the interest rate constant. D) Both A and C are correct.