Suppose that this year’s nominal GDP is $16 trillion. To account for the effects of inflation, we construct a price-level index in which an index value of 100 represents the price level five years ago. Using that index, we find that this year’s real GDP is $15 trillion. Given those numbers, we can conclude that the current value of the index is:
a. Higher than 100.
b. Lower than 100.
c. Still 100.
Answer: a. Higher than 100.
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When people exchange money for financial assets, the _____ rises
a. real GDP b. price level c. unemployment rate d. nominal GDP e. interest rate
The amount of income left after an individual pays taxes to the government is called disposable income
a. True b. False Indicate whether the statement is true or false
Refer to Figure 26.5. Which firm is producing the allocatively efficient level of output and is using the least amount of economic resources to produce each unit of output?
A. All of the firms. B. Firm D only. C. Firm B only. D. Firms B and D only.
Using the table provided above to construct Lorenz curves representing 1990 and 2011, what do you discover and how is this interpreted?
A) The Lorenz curve for 1990 is further away from the line of equality than the curve for 2011. This means that inequality is decreasing. B) The Lorenz curve for 1990 is further away from the line of equality than the curve for 2011. This means that inequality is increasing. C) The Lorenz curve for 2011 is further away from the line of equality than the curve for 1990. This means that inequality is increasing. D) The Lorenz curve for 2011 is further away from the line of equality than the curve for 1990. This means that inequality is decreasing.