An important difference between the GDP deflator and the consumer price index is that
a. the GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers.
b. the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.
c. the GDP deflator reflects the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
d. the GDP deflator reflects the prices of all final goods and services bought by producers and consumers, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
b
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Tax revenues can be found by
A) multiplying the tax base by the (average) tax rate. B) dividing the tax base by the (average) tax rate. C) summing the tax base and the (average) tax rate. D) multiplying taxable income by the marginal tax rate.
?Hair Pins /hourBandanas /hourNigel410Mia93
Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 18.3. Mia's opportunity cost of producing one bandana is:
A. 1/3 of a hair pin. B. 2.5 hair pins. C. 3 hair pins. D. 9 hair pins.
Part of the reason for the Mexican peso crisis of 1994 was Mexico's decision to
A) allow the peso to depreciate too rapidly. B) allow the peso to appreciate too rapidly. C) maintain relatively low nominal interest rates in the face of relatively high inflation. D) maintain a roughly fixed nominal exchange rate in the face of relatively high inflation. E) run a very small budget deficit in the face of relatively high inflation.
When the Federal Reserve increases its target rate of inflation, it will set a ________ real interest rate at every inflation rate and the aggregate demand curve will ________.
A. higher; shift to the right B. lower; shift to the left C. higher; shift to the left D. lower; shift to the right