The chain-weighted output index method of measuring real GDP is based on
A) using current prices rather than base year prices.
B) averaging the market value of the expenditures over a two year period and then comparing with a base period.
C) using the prices of two adjacent years to calculate the growth rate of real GDP.
D) averaging the nominal and real measures of GDP to come up with a more accurate figure.
C
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An economy has no imports or income taxes. The MPC is 0.75 and real GDP is $120 billion. Businesses increase investment by $4 billion. The multiplier is ________ and the change in real GDP from the increase in investment is ________ billion
A) 5; $16 B) 4; $25 C) 0.75; $3 D) 5; $25 E) 4; $16
For many years the U.S. government imposed quotas on cheap, Middle Eastern oil imports. The U.S. consumer consequently paid $3 billion more per year for oil products. A likely rationale for such a policy is
A. people in the oil industry deserved the transfer. B. conservation. C. one cannot be dependent on foreign supplies of so crucial a resource. D. American oil was of higher quality and deserved a higher price.
The marginal propensity to save is:
a. the change in saving induced by a change in consumption. b. (change in S) / (change in Y). c. 1 ? MPC / MPC. d. (change in Y ? bY) / (change in Y). e. 1 ? MPC.
Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs
What will be an ideal response?