Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,
a. nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90.
b. nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1.
c. nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90.
d. nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1.
a
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Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?
a. Higher tax rates. b. A higher rate of investment. c. A smaller trade sector. d. Greater use of taxation to transfer income from the rich to the poor.
Under the gold standard, a nation’s domestic economic policy
a. was subordinate to balance-of-payments adjustments. b. controlled balance-of-payments adjustments. c. was unrelated to balance-of-payments adjustments. d. was controlled by the World Bank.
If the interest rate on saving is 5 percent per period, then the true opportunity cost of being paid $100 next period instead of this period is
A. $5. B. $105. C. less than $5 if people suffer from a “defective telescopic faculty.” D. more than $5 if people suffer from a “defective telescopic faculty.”
Which of the following equals the current yield on a bond?
A. (Total reserves - required reserves) × the money multiplier. B. Annual interest payment ÷ current market price of the bond. C. Required reserve ratio ×total deposits. D. Total reserves - required reserves.