Based on the table "Real and Nominal GDP," if year one is the base year, then the GDP deflator for year two is ________
A) 95.5
B) 123.5
C) 118
D) 104.7
E) 116.6
D
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If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____
a. nominal income declines and real income increases b. both nominal income and real income increase by 5 percent c. nominal income increases and real income declines d. both nominal income and real income decrease by 5 percent e. nominal income increases by 5 percent and real income is unchanged
Which of the following macroeconomic variables would be drawn accurately as perfectly inelastic?
A. Aggregate demand B. Short-run aggregate supply C. Long-run aggregate supply D. None of these should be drawn as perfectly inelastic.
An industry utilizes capital and two types of labor. Unskilled labor is a substitute for capital while the skilled labor is complementary to capital. An increase in the price of capital will
A. induce the firms in the industry to cut back on all levels-capital, unskilled and skilled labor. B. cause the demand for labor to increase, raising wages of both skilled and unskilled labor. C. cause the demand for skilled labor to rise and the demand for unskilled labor to fall. D. cause the wage of unskilled labor to rise relative to the price of skilled labor.
Which of the following countries offered bailouts for the weaker economies in the European Union during the economic downturn?
A. Spain and Greece B. Germany and France C. France and Spain D. Italy and Germany