Under the old Soviet communist system, government planning was substituted for the _________________.
Fill in the blank(s) with the appropriate word(s).
price mechanism
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If the MPC = 1.0, then MPS must be _____ and the income multiplier is
a. 0; infinite b. 0; 0 c. 10; 10 d. 100; 0 e. 1; 10
Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000 pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per pound. For 2010,
a. nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83. b. nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16. c. nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16. d. nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.
Assume that Zark and Bora are related products on the planet Zappo. It is observed that when the price of Zark falls (due to the cyclical nature of the Zark harvest), the demand for Bora quickly rises. On the basis of this information which of the following can be considered true?
a. Zark and Bora are substitutes. b. Zark and Bora are complements. c. Zark and Bora are both luxury goods. d. Zark and Bora are inferior goods.
In the income-expenditure model, at equilibrium GDP
a. either unemployment or inflation may occur. b. inflation can occur but unemployment cannot. c. unemployment can occur but inflation cannot. d. both unemployment and inflation are impossible.