The price of dishwashers increases dramatically, causing a 1 percent increase in the CPI. The price increase will most likely cause the GDP deflator to increase by
a. more than 1 percent.
b. less than 1 percent.
c. 1 percent.
d. None of the above is correct; this particular price increase will not affect the GDP deflator.
B
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Liz has a comparative advantage in ________ and an absolute advantage in ________
A) smoothies only; both goods B) salads only; salads only C) both goods; both goods D) salads only; both goods E) smoothies only; smoothies only
Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor, the
a. demand curve for toothpaste shifts to the left. b. supply curve for toothpaste shifts to the right. c. quantity demanded of toothpaste decreases, and the quantity of toothpaste that firms want to supply increases. d. quantity supplied of toothpaste stays the same.
Using the UIP equation, equilibrium in the short run occurs when
a) arbitrage is possible b) the spot rate is such that foreign and domestic investment returns are equalized c) the spot rate and forward rate are equalized d) foreign interest rates and domestic interest rates are equalized
Use the following graph to answer the next question.
A 3% general sales tax would have a structure that is illustrated by
A. curve A. B. curve B. C. curve C. D. none of the curves.