The GDP deflator or price index equals:
A. Gross private domestic investment less the consumption of fixed capital
B. Gross national product less net foreign factor income earned in the United States
C. Nominal GDP divided by real GDP
D. Real GDP divided by nominal GDP
C. Nominal GDP divided by real GDP
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When financial intermediaries deleverage, firms cannot fund investment opportunities resulting in
A) a contraction of economic activity. B) an economic boom. C) an increased opportunity for growth. D) a call for government regulation.
Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve on the vertical section, increasing the discount rate
A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
Each member of a cartel
a. faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit. b. faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit. c. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit. d. has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit. e. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit.
A tariff
a. lowers the domestic price of the exported good below the world price. b. keeps the domestic price of the exported good the same as the world price. c. raises the domestic price of the imported good above the world price. d. lowers the domestic price of the imported good below the world price.