A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n):
a. Decrease in the supply of gasoline and an increase in the demand for gasoline
b. Increase in the supply of gasoline and a decrease in the demand for gasoline
c. Increase in the demand for and the supply of gasoline
d. Decrease in the demand for and the supply of gasoline
Answer: a. Decrease in the supply of gasoline and an increase in the demand for gasoline
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If the nominal gross domestic product (GDP) for a year is $5.4 trillion, and the real gross domestic product (GDP) for the same year is $3.6 trillion, the GDP price index is _____
a. 0.667 b. 150 c. 66.67 d. 50 e. 33.33
Most government purchases are made at the federal level and not at the state level
a. True b. False Indicate whether the statement is true or false
When borrowing is done in a foreign currency and lending is done in the domestic currency, what event creates a downturn in the economy?
a. a deprecation of its exchange rate b. an appreciation of its exchange rate c. an appreciation of its interest rate d. a depreciation of its interest rate
Exchange rates are affected by changes in:
A. The supply of a currency only. B. The demand for a currency only. C. Both the demand for and supply of a currency. D. The export of goods only.