The purchasing power of one dollar is equal to _____
a. real GDP divided by nominal GDP
b. nominal GDP divided by real GDP
c. 1 minus the average price level
d. the reciprocal of the average price level
e. the implicit GDP deflator divided by the CPI
d
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If the savings rate of Country A increases from 10% to 20% and technology growth is zero, then the neoclassical model predicts that in the steady state
a. the capital-to-labor ratio will not grow in the long-run but higher than it is now. b. the capital-to-labor ratio will grow 10% faster. c. the growth rate of output will be permanently higher. d. the level of output will be permanently higher. e. a and d.
If Ming is willing to pay $75 to attend the Broadway production of The Lion King but actually pays $40, she receives a consumer surplus of $35
a. True b. False Indicate whether the statement is true or false
An example of a negative externality is: a. the benefit you receive when your neighbor installs a smoke detector
b. the reduction in profits for your company that occurs when there is a decrease in consumer demand for the product you manufacture. c. the sleep you lose when your neighbor throws a loud party next door that keeps you awake. d. the change in the property values of your neighbors' homes when you paint your house and landscape your front yard
An example of income earned but not received is corporate dividends
Indicate whether the statement is true or false