If nominal GDP increased 2 percent during a year, while real GDP increased 4 percent, the
a. price level must have increased approximately 2 percent compared to the prior year.
b. price level must have decreased approximately 2 percent compared to the prior year.
c. price level must have decreased approximately 50 percent compared to the prior year.
d. unemployment rate must have increased during the year.
B
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Which of the following is NOT part of the expenditure approach to measuring GDP?
A) gross private domestic investment B) net exports of goods and services C) net interest D) personal consumption expenditures
Ariel is a Canadian citizen who works in Montreal, Canada and owns a winter home in Palm Beach, Florida. When Ariel spends the winters in Palm Beach, an increase in the value of the Canadian dollar relative to the U.S. dollar should
A) hurt Ariel as it is now more expensive to live in Palm Beach since the Canadian dollar appreciation. B) help Ariel as each Canadian dollar of her salary is now worth more U.S. dollars. C) hurt Ariel as each Canadian dollar of her salary is now worth less U.S. dollars. D) help Ariel as it is now less expensive to live in Canada since the Canadian dollar appreciation.
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces
Which of the following is true about the comparative advantage between the two countries? A) Switzerland has the comparative advantage in chocolate. B) Germany has the comparative advantage in watches and chocolate. C) Germany has the comparative advantage in watches. D) Switzerland has the comparative advantage in watches.
Refer to Figure 2-12. What is the opportunity cost of producing one gallon of milk in Tahiti?
A) 5/6 of a gallon of honey B) 1.5 gallons of honey C) 1.2 gallons of honey D) 1/2 of a gallon of honey