In computing GDP, market prices are used in the calculations because
a. market prices are constant over time
b. market prices do not reflect how prices change over time.
c. market prices are consistently free of inflation.
d. market prices can be used to combine the variety of goods and services produced in an economy into a single measure.
d
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The above table gives assets and deposits for a (small) bank. The bank's deposits that are part of M2 are equal to
A) $600. B) $1600. C) $3,100. D) $30. E) $5,100.
Refer to Figure 15-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) there is pressure on wages and prices to fall. B) the unemployment rate is greater than the natural rate of unemployment. C) firms are producing above capacity. D) incomes and profits are falling.
Suppose a U.S. citizen invests $1,000 to purchase a one-year Japanese bond that has an interest yield of 10 percent. If the dollar appreciates 20 percent against the Japanese yen by the maturity date, the dollar value of the proceeds is _____
a. $900 b. $1,100 c. $1,300 d. $1,500 e. $1,200
Based on this graph, which of the following would happen if P1 drops below the line where P is now?
a. The farmer would increase her profit.
b. The farmer would shut down.
c. The farmer would maintain equilibrium.
d. The farmer would hire more employees.