If the real gross domestic product (GDP) is $5 trillion for a particular year and the GDP price index is 140, then the nominal GDP is $7 trillion
a. True
b. False
Indicate whether the statement is true or false
True
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To reduce the effects of crowding out caused by an increase in government expenditures, the Federal Reserve could
a. increase the money supply by buying bonds. b. increase the money supply by selling bonds. c. decrease the money supply by buying bonds. d. increase the money supply by selling bonds.
The individual supply curve for labor is the relationship between the wage and the quantity of labor that:
A. all workers are willing to provide. B. any given worker is willing to provide. C. all firms are willing to employ. D. any given firm is willing to employ.
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4.00. The minimum possible average variable cost is $3.50. The market price of the product is $3.00. To maximize profits or minimize losses, the firm should:
A. Continue to produce 200 units B. Continue production, but produce less than 200 units C. Increase production to more than 200 units D. Shut down
Why can monetary policymakers neutralize demand shocks but not supply shocks?
What will be an ideal response?