The purpose of chain-weighted price adjustments in the calculation of GDP is to
A. Adjust for changes in average prices.
B. Adjust for changes in relative prices.
C. Convert NDP to GDP.
D. Adjust for changes in production.
Answer: B
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The prisoner's dilemma illustrates
A) how oligopolists engage in implicit collusion under strategic situations. B) how cooperation in strategic situations leads to the economically efficient market outcome. C) why firms will not cooperate if they behave strategically. D) why firms have an incentive to cheat on agreements.
In the short run, the dominant effect of deficit reduction causes an
a. outward shift of the aggregate supply curve. b. inward shift of the aggregate supply curve. c. outward shift of the aggregate demand curve. d. inward shift of the aggregate demand curve.
Which of the following is true of stimulus policy enacted in 2009?
a. We can be sure that it reduced the severity of the recession because the recession was less severe than the Great Depression. b. We can be sure that it reduced the severity of the recession even though the recession was more severe than the Great Depression. c. We can not be sure that it reduced the severity of the recession, but the recession was less severe than the Great Depression. d. We can not be sure that it reduced the severity of the recession because the recession was more severe than the Great Depression.
Suppose that in a certain market there is an increase in demand, but the market price does not quickly adjust to a new equilibrium price. What situation will exist in this market until the price adjusts?
A. Excess demand, because the market price is higher than the equilibrium price B. Excess supply, because the market price is higher than the equilibrium price C. Excess demand, because the market price is lower than the equilibrium price D. Excess supply, because the market price is lower than the equilibrium price.