For monitoring fluctuations in the national economy, which measure of income is best?
a. GDP
b. GNP
c. NNP
d. It does not matter very much which measure we use.
d
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What is ‘government failure'? How would you draw the line between public and private activity?
What will be an ideal response?
Describe the fractional reserve banking system
What will be an ideal response?
In a model with money neutrality, a 10% increase in the money supply leads to an increase of prices by
A) more than 10%. B) 10%. C) less than 10%, but more than zero. D) zero.
The price of a new textbook increased from $60 to $75 in one year, while the price of a used textbook increased by 25 percent. What happened to the relative price of a used textbook?
A) It increased by 25 percent. B) It increased by 10 percent. C) It remained constant. D) It can't be determined without knowing the nominal price of the used textbook in at least one of the years.