If a country had a real GDP of $500 million, and the GDP deflator was110, what is the nominal GDP?
a. $440 million
b. $540 million
c. $450 million
d. $550 billion
d. $550 billion
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The first and biggest problem the EU faces in its expansion to the east is
A) the reform of its agricultural subsidy programs. B) the lack of democracy in the countries that are most likely to become members. C) the unwillingness of the new members to adopt EU rules. D) the lack of market economies in the countries that are most likely to become members. E) the unwillingness of citizens in the new member countries to migrate to higher income countries.
When workers save less during their working lives due to the fact that they have been paying Social Security taxes, this is known as
A. the Social Security effect. B. the wealth substitution effect. C. the bequest effect. D. the life cycle hypothesis.
Which of the following is NOT a social cost of inflation?
A. The money that people hold loses value due to the inflation tax. B. People hold smaller real balances and so have to make more frequent trips to the bank. C. Firms have to spend money to change prices more frequently. D. Inflation leads to greater variability in the relative prices charged by firms.
A firm doubled all its inputs and experienced a 50% increase in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level. B. diseconomies of scale at the current output level. C. a constant long-run average cost at the current output level. D. diminishing marginal returns at the current output level.