Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas) but sold them for $12 each. Based on this
information we can conclude that Harry's production of large pepperoni pizzas this year:
A. increased nominal GDP by $20,000 but left real GDP unchanged.
B. increased nominal GDP by $120,000 and increased real GDP by $100,000.
C. left nominal GDP unchanged but increased real GDP by $20,000.
D. increased nominal GDP by $120,000 but left real GDP unchanged.
Answer: A
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Refer to Table 2-12. Does either Guatemala or Honduras have an absolute advantage and if so, in what product?
A) Honduras only has an absolute advantage in producing sailboats. B) Guatemala has an absolute advantage in producing both products. C) Guatemala only has an absolute advantage in producing canoes. D) Honduras only has an absolute advantage in producing canoes.
If we were to compare the monopolistically competitive firm's long-run outcome to that of a perfectly competitive one, we would conclude that the monopolistically competitive firm:
A. creates less consumer surplus. B. produces more output. C. earns the same profit as a perfectly competitive firm. D. All of these statements are true.
Explain why monetary policy is needed specifically with regard to the existence of excess reserves. Compare and contrast the effectiveness of monetary policy during the Great Depression and the Great Recession?
Kroger's grocery chain wants to finance the purchase of a new warehouse. It decides to sell bonds
a. Kroger's plans to use equity financing and its action is part of the demand for loanable funds. b. Kroger's plans to use equity financing and its action is part of the supply of loanable funds. c. Kroger's plans to use debt financing and its action is part of the demand for loanable funds. d. Kroger's plans to use debt financing and its action is part of the supply of loanable funds.