The GDP deflator of an economy is calculated by:
a. dividing nominal GDP by real GDP and multiplying by 100.
b. dividing real GDP by nominal GDP and multiplying by 100.
c. dividing nominal GDP by real GDP and multiplying by 1,000.
d. dividing real GDP by nominal GDP and multiplying by 1,000.
a
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An exchange rate is
A) the price of one currency in terms of another. B) the monetary value of goods and services exchanged for imports. C) the amount of gold a currency will buy. D) All of the above.
A reaction function is
A) companies colluding in order to make higher than competitive rates of return. B) the manner in which one oligopolist reacts to a change in price made by another oligopolist in the industry. C) a game in which firms will not negotiate in any way. D) when plans made by firms are known as game strategies.
Unemployment or underemployment is shown by a point located inside the production possibilities curve
Indicate whether the statement is true or false
A direct cost of public debt is:
A. it can pay for investments that will lead to economic growth in the long run. B. the interest the government has to pay to the people it has borrowed from. C. it allows the government to be flexible when something unexpected happens. D. All of these are costs to holding public debt.