In which of the following cases would there be an effect on the value of the U.S. consumer price index, but not on the value of the U.S. GDP deflator?
a. All of the truck tires that are produced by a certain company in South Korea are sold to the U.S. military, and the price of these tires decreases.
b. All of the truck tires that are produced by a certain company in California are sold to the U.S. military, and the price of these tires decreases.
c. Most of the bananas that are produced by a certain company in Honduras end up in U.S. grocery stores, and the price of these bananas increases.
d. Most of the earth-moving machines that are produced by a certain company in Illinois are exported to other countries, and the price of these machines increases.
c
You might also like to view...
Rather than go out to eat by yourself, you decide to stay at home and fix dinner for yourself and your two roommates. Your roommates applaud your decision
Your roommates tell you that your decision to eat at home has no opportunity cost because you already have all the dinner ingredients in your pantry. Is this comment correct?
Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) Unemployment will decline. B) The aggregate demand curve will shift to the left. C) Output will decline. D) Prices will decline.
What are the assumptions of the model of perfect competition? Explain why each is important for short-run and long-run equilibrium.
What will be an ideal response?
Consider the monopolistic competition, entry, and exit curve. Which of the following would cause both the perceived demand curve and the marginal revenue curve to shift to the right?
a. Gains induce new firms to leave the industry, causing demand from the original firm to fall. b. Gains induce new firms to leave the industry, causing demand from the original firm to rise. c. Losses induce firms to leave the industry, causing demand from the original firm to fall. d. Losses induce firms to leave the industry, causing demand from the original firm to rise.