The deregulation of the airline industry caused
a. prices to fall and service to decline
b. prices to fall and service to improve
c. prices to rise and service to decline
d. prices to rise and service to improve
Ans: b. prices to fall and service to improve
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The GDP deflator: a. takes government purchases into account, unlike the CPI
b. takes business investment purchases into account, unlike the CPI. c. is generally used to adjust nominal GDP to calculate real GDP. d. All of the above are true.
Which of the following is(are) indexed to inflation?
A. Standard deduction B. Employer contributions to pensions C. Gifts and inheritances D. None of the answer options are correct.
If the rational expectation theory is accurate, equilibrium real GDP will change in the short run: a. whenever the aggregate demand curve shifts
b. only if discretionary fiscal policy is used. c. only if there is a shift in aggregate demand that could not have been predicted from the information available to the public. d. only if discretionary monetary policy is used.
Which of the following is not a reason for the existence of a monopoly?
a. patents b. marginal-cost pricing c. economies of scale d. trademarks