The GDP deflator is a
A. price index that tracks the price level of commodities that firms purchase from other firms.
B. statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas.
C. statistical measure of a weighted average of prices of commodities that firms produce and sell.
D. price index measuring the changes in prices of all new goods and services produced in the economy.
Answer: D
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Compare and contrast the relative elasticities that you are likely to find between toothpicks and furniture. Explain your answer
What will be an ideal response?
In order to earn an economic profit, a firm needs to charge a price in excess of
A) accounting average cost. B) normal average costs. C) economic average cost. D) long-run fixed costs.
If an economy’s resources are fully employed,
A. a great deal of unemployment will be needed to achieve even a small reduction in inflation. B. the aggregate supply curve (and thus the Phillips curve) will be flat. C. the aggregate supply curve (and thus the Phillips curve) will be steep. D. Both a and c are correct.
Business fixed investment includes purchases of
A. inventories. B. land and energy. C. capital equipment and structures. D. long-term bonds.