If nominal gross domestic product (GDP) for a particular year is $6 trillion and real gross domestic product (GDP) for that year is $5 trillion, then the GDP price index for that year is _____
a. 1.2
b. 17
c. 20
d. 83
e. 120
e
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Which of the following might be considered an automatic fiscal stabilizer?
A) government spending for the war effort B) 401(k) retirement program C) government budgeting for education D) unemployment compensation
If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios), then if they both use the same currency
A) neither country has a comparative advantage. B) only the low wage country has a comparative advantage. C) only the high wage country has a comparative advantage. D) consumers will still find trade worth while from their perspective. E) it is possible that both will enjoy the conventional gains from trade.
When there is no market for a negative externality, the producer of the externality _____
a. has strong incentive to consider the costs it imposes on others b. will try to create a market c. will limit production of the good producing the externality d. has no incentive to consider the costs it imposes on others
Refer to Figure 14.1. The substitution effect of the wage increase on the amount of hours of leisure is:
A) L1 to L0 B) L1 to L2. C) L0 to L2. D) L0 to L1. E) none of the above