If real GDP in a year was $4,031 billion and the price index was 124, then nominal GDP in that year was approximately:
a. $5,121 billion
b. $4,445 billion
c. $5,233 billion
d. $4,998 billion
Answer: d. $4,998 billion
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A.P. Lerner believes that society maximizes its total utility when income distribution is
a. perfectly equal, assuming individual utility functions are different b. perfectly equal, assuming individual utility functions are the same c. perfectly unequal, assuming individual utility functions are the same d. perfectly unequal, assuming individual utility functions are different e. whatever the market dictates because individual utility functions are different
Assume that Brazil gives up 3 automobiles for each ton of coffee it produces, while Peru gives up 7 automobiles for each ton of coffee it produces.
A) Brazil has a comparative advantage in automobile production and should specialize in coffee. B) Brazil has a comparative advantage in coffee production and should specialize in the production of automobiles. C) Brazil has a comparative advantage in coffee production and should specialize in coffee production. D) Brazil has a comparative advantage in automobile production and should specialize in automobile production.
Which is NOT considered money?
A. Checking account balances B. Traveler's checks issued by non-banks C. Credit cards D. Currency
The figure below shows the U.S. market for imported wine. For simplicity, we consider export supply curves to be flat. Chilean wine is available for $480 per barrel and French wine is available for $420 per barrel.
Suppose the United States has a tariff of $80 per barrel on imported wine. Then, the United States joins a free-trade area with Chile. Calculate the gain arising from trade creation after the United States joins the free-trade area.
A. $800 billion B. $550 million C. $250 million D. $50 million