The GDP deflator in year 3 is 85 using year 1 as a base year. This means that, on average, the price of goods and services is
A. 7.5% higher in year 3 than in year 1.
B. 15% higher in year 1 than in year 3.
C. 7.5% higher in year 1 than in year 3.
D. 15% higher in year 3 than in year 1.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
When the Fed buys $10 million in T-bills, interest rates will ________ because the LM curve shifts ________
A) fall; left due to the increase in the demand for money and loans B) rise; right due to the increase in the supply of money and loans C) fall; right due to the increase in the supply of money and loans D) rise; left due to the increase in the supply of money and loans
An effluent fee is an example of
A) a government policy to correct for an external benefit. B) a government policy to promote the production of a product with an external cost. C) a government policy to promote the production of a product with an external benefit. D) a government policy to correct for an external cost.
Few countries have a higher GDP per capita than the weighted average of Canada, Mexico and U.S. GDP
Indicate whether the statement is true or false