Under what circumstances would the GDP deflator be less than 100 after the base year?
A) The GDP deflator will be less than 100 if there has been inflation relative to the base year.
B) The GDP deflator will be less than 100 if there has been inflation of less than 2% per year relative to the base year.
C) The GDP deflator will be less than 100 if there has been deflation relative to the base year.
D) There are no circumstances under which the GDP deflator could be less than 100.
Answer: C
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Suppose China Airlines wants to purchase a French Airbus. The price of the Airbus is 95 million Euro. If the exchange rate is 1 euro per 10 yuan, the price of this airplane to China Airlines is
A) 950 million yuan. B) 10.52 million yuan. C) 10 million yuan. D) 9.5 million yuan.
The water and diamonds paradox of value
A) is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive. B) points out that we generally have a low total utility of water and a high total utility of diamonds. C) is resolved by the principle that market price is determined by total utility, not marginal utility. D) none of the above
Government shares in the gains to risk-bearing activities but does not _____
a. share in the losses when depreciation is straight-line b. share in the losses when the investor has no other income c. share in the losses when depreciation is accelerated d. share in the losses when capital losses are allowed
According to the graph shown, if the price were $5 a:
A. shortage would exist, signaling sellers to leave the market.
B. shortage would exist, signaling buyers to bid up the price.
C. surplus would exist, signaling sellers to drop their price.
D. surplus would exist, signaling buyers to bid up the price.