If unemployment is below the natural rate, GDP is below potential output
a. True
b. False
B
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The domestic currency price of a representative foreign expenditure basket is
A) P, the domestic price level. B) E, the nominal exchange rate. C) P times E, the domestic price level times the domestic price level. D) P , the foreign price level. E) P times E, the foreign price level times the nominal exchange rate.
The process in which people seeking higher yielding securities take their funds out of the banking system thus restricting the amount of funds banks can lend is called
A) capital mobility. B) loophole mining. C) disintermediation. D) deposit jumping.
Which of the following is one reason why trade makes all parties better off? a. Because it always expands the amount of domestic production of each good and service, and more is preferred to less. b. Because it permits all parties to acquire some items better suited to their tastes
c. Because it makes people appreciate what they have, and they are happier. d. Because it encourages consumption rather than saving.
Emily is a writer, and uses her tablet computer to write a 500-page novel that she sells to a publishing company for $500,000. If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?
A) $25 million B) $20 million C) $500,000 D) $50,000