The purchasing power parity (PPP) theory suggests the prices of identical items will equalize internationally. An illustration that supports this theory is the fact that the price of a McDonald's "Big Mac" is the same around the world
a. True
b. False
B
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Government stabilization policy would be unnecessary if the economy automatically gravitated toward
A. full inflation. B. full employment. C. full recession. D. an inflationary gap.
The difference between Gross National Product and Net National Product is the
A. rate of inflation. B. statistical discrepancy encountered in calculating GDP. C. difference between real versus nominal GDP. D. depreciation of the economy’s capital stock.
For most goods and most people, marginal utility probably
A. continues to increase as larger quantities are purchased. B. plummets after the first few units but soon begins to rise. C. declines as consumption increases. D. is negative after the first unit of a good is purchased. E. is positive and rising for most goods.
Fiscal policy is determined by
A) Congress and the Federal Reserve. B) Congress and the president. C) the president and the Federal Reserve. D) the Federal Reserve.