If nominal GDP increases by 5 percent a year and the GDP price index rises by 2 percent a year, then real GDP increases by ________
A. 7 percent a year
B. 3 percent a year
C. 2.5 percent a year
D. 10 percent a year
B Growth in nominal GDP can be separated into growth in the GPD price index plus growth in real GDP.
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If the cross-price elasticity of demand for computers and software is negative, this means the two goods are
A) normal. B) inferior. C) substitutes. D) complements.
Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?
What will be an ideal response?
Which of the following would most likely be classified as a natural monopoly?
A) a city water district B) Microsoft C) Disneyland D) Exxon-Mobil
Suppose the required reserve ratio is 10 percent, but banks choose to hold an additional 15 percent of demand deposits as excess reserves. Under these conditions, the demand deposit multiplier will be
a. 0 b. 4 c. 5 d. 6.67 e. 10