In periods when prices are falling, on average,
A) real GDP will grow as fast as nominal GDP. B) real GDP will grow slower than nominal GDP.
C) real GDP will grow faster than nominal GDP. D) one cannot calculate real GDP.
C
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The figure above shows Sam's budget line. Sam's budget line shows
A) which combinations of gasoline and coffee Sam can afford. B) which combinations of gasoline and coffee Sam is planning to purchase. C) whether or not Sam thinks gasoline and coffee are worth their prices. D) whether or not Sam currently has enough gasoline and enough coffee.
Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion. What is the rate of growth of real GDP between 2015 and 2016?
A) -10% B) -5% C) -2% D) -1%
The effectiveness of the federal funds rate as an operating target is limited because
A) the Treasury often uses federal funds market. B) reserve requirements often change. C) the demand for reserves is difficult to predict. D) the deposit expansion multiplier is difficult to predict.
A value of the absolute price elasticity of demand equal to 0.4 indicates that
A. a 4 percent increase in price leads to a 10 percent decrease in quantity demanded. B. a 1 percent increase in price leads to a 4 percent decrease in quantity demanded. C. a 0.4 percent increase in price leads to a 1 percent decrease in quantity demanded. D. a 10 percent increase in price leads to a 4 percent decrease in quantity demanded.