One of the possible consequences of the expenditure schedule lying below the level of full employment GDP is
a. unemployment.
b. rising prices.
c. increasing production.
d. decreasing inventories.
a
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Assume an economy produces only footballs and baseballs and the base year is 2005. Quantity producedPrices 2005200620052006Footballs200300$20$25Baseballs500600$10$15Given the data in the table above, what is the value of real GDP in 2006?
A. $12,500 B. $10,000 C. $ 9,000 D. $12, 000
The "new product bias" in the consumer price index refers to the idea that
A) consumers switch to old goods when the prices of new goods increase, and the CPI underestimates the cost to consumers. B) consumers switch to new goods when the prices of old goods increase, and the CPI overestimates the cost to consumers. C) new products' prices often decrease after their initial introduction, and the CPI is adjusted infrequently and overestimates the cost to consumers. D) consumers prefer new goods, even if they are worse in quality than old goods, and this causes the CPI to underestimate the cost to consumers.
According to the simple Keynesian model, when planned expenditure exceeds income
a. prices rise. b. unplanned inventory investment is negative. c. income falls. d. planned expenditure falls. e. both b and d.
If goods x and y are complements, then the cross price elasticity of demand between them will be:
a. positive. b. negative. c. zero. d. infinity.