If the GDP deflator is less than 100, then
A. nominal GDP is greater than real GDP.
B. nominal GDP equals real GDP.
C. prices decreased by more than half between the current and the base years.
D. nominal GDP is lower than real GDP.
Answer: D
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If real GDP is $200, the price level is 2.5, and velocity is 5, then the quantity of money is
A) $100. B) $500. C) $750. D) $200. E) $1,000.
The short-run Phillips curve is
A) U-shaped. B) vertical at the natural unemployment rate. C) upward sloping. D) downward sloping. E) horizontal at the expected inflation rate.
Refer to the above table. If the price is $5, the perfectly competitive firm should produce
A. 105 units. B. 106 units. C. 107 units. D. 104 units.
If the FDIC eliminated its insurance program for deposits, then
A) banks would probably hold fewer reserves. B) moral hazard would be increased. C) individual depositors would have more incentive to ascertain the soundness and solvency of the bank. D) the banking system would probably fail.