List three different price indices and explain how they differ in terms of the market basket on which they are based
What will be an ideal response?
Three examples of price indices are the GDP deflator, the consumer price index, and the producer price index. All three differ by the kinds of goods that are contained in the market basket that is used to calculate the average level of prices. The GDP deflator is based on the average price of all final goods and services produced. The consumer price index is based on the average price of 211 goods/services purchased by the typical urban family of four. The producer price index is based on the prices received by producers of goods and services at all stages of the production process.
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In September 2007, Regions Bank held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2007 and September 2008, deposits decreased from $114 million to $95 million
If Regions Bank wants to maintain its desired reserve ratio in 2008, it will A) increase its reserves. B) definitely make more loans. C) cannot make more loans. D) decrease its reserves.
The European Central Bank has its headquarter in
A) London. B) Berlin. C) Frankfurt. D) Paris. E) Brussels.
Which of the following statements is correct?
A) The demand curve of the perfectly competitive industry is elastic as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is inelastic because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve of an individual firm is horizontal with a height equal to the product price. D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
Disposable income:
What will be an ideal response?