A country's GNP is always larger than its GDP
Indicate whether the statement is true or false
FALSE
Explanation: GNP will be larger when the country is a net exporter of factors of production.
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The reference base period for the CPI has an index number of
A) 100. B) 10. C) 1,000. D) 0. E) 1.
The Bank of Techland is the largest bank in Techland. Which of the following is likely to be true if this bank fails?
A) Real interest rates in Techland will fall. B) Labor supply in Techland will fall. C) Real wages in Techland will remain unchanged. D) Techland's output will fall.
If the Fed purchases securities in the amount of $100,000 from First Union Bank, then the
A) liabilities of First Union decrease by $100,000. B) assets of First Union Bank change in composition but not in amount. C) assets of the Fed decrease by $100,000. D) liabilities of the Fed change in composition but not in amount. E) assets of First Union Bank decrease by $100,000.
If the inflation rate is greater than the nominal interest rate, then the
A) real interest rate will be negative. B) real interest rate will be positive. C) inflation rate will increase. D) inflation rate will decrease. E) nominal interest rate will be negative.