What is the relationship between real and nominal GDP?
a. real GDP = nominal GDP – Price level
b. nominal GDP = Real GDP/Price level
c. real GDP = nominal GDP/Price level
d. real GDP = nominal GDP + Price level.
C
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In the one-period competitive model we have been studying
A) both consumption and total factor productivity are exogenous. B) consumption is exogenous and total factor productivity is endogenous. C) consumption is endogenous and total factor productivity is exogenous. D) both consumption and total factor productivity are endogenous.
Excess quantity demanded may result from
A) a government-imposed minimum price above market equilibrium. B) a government-imposed maximum price below market equilibrium. C) an oversupply of output. D) technological progress.
If the Fed wishes to increase the money supply, it can:
A. sell a bond to bank, and take the money it receives in exchange out of circulation in the economy. B. buy bonds from a bank, giving the bank cash in return, which it can then lend out. C. sell a bond to a bank, and take the money it receives and lend it out to someone else. D. buy a bond from a bank, requiring the bank to hold the money it receives as excess reserves.
If increasing returns is in effect
A) average costs rise. B) marginal costs rise. C) marginal costs fall. D) average revenue is constant.