Suppose you drive downtown, pay for parking at a private parking garage, and go to see an investment advisor. He charges you a $5 fee to advise you to purchase 100 shares of stock, which you do. Which of these transactions is NOT included in GDP?
A. your purchase of the stock
B. paying the $5 fee to the investment advisor
C. the purchase of gas for the trip
D. paying the parking fee
Answer: A
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If you were a professor of economics and asked the class what would happen when the Fed raises the legal reserve requirement, you would hope to hear that the
a. banks must reduce the amount of loans they make b. banks can increase the amount of loans they make c. banks must reduce the interest rate they charge on the loans they make d. banks can raise the interest rate on loans they make e. banks must reduce the federal funds rate they charge to other banks
The nation closest to a centrally planned, socialist economy is
A. China. B. Japan. C. the United States. D. Norway.
A decrease in the price level
a. increases the quantity of goods and services supplied in the short run. b. decreases the quantity of goods and services supplied in the long run. c. decreases the quantity of goods and services demanded. d. increases the quantity of goods and services demanded.
When the price level increases people:
A. feel more wealthy. B. demand a smaller quantity of goods and services in the aggregate. C. have the same real value of assets, regardless of the change in the price level. D. want to spend more, but can't due to the prices of all goods and services going up.