If there are 20 pounds of coffee included in the market basket, how many pounds of tea are included in the market basket?
Examine the following table of data used for a price index and then answer the
question below.
a. 5
b. 10
c. 15
d. 20
b. 10
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Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. The GDP Price Index rises, and nominal value of the domestic currency falls. c. The GDP Price Index rises, and nominal value of the domestic currency rises. d. The GDP Price Index falls, and nominal value of the domestic currency rises. e. The GDP Price Index rises, and nominal value of the domestic currency remains the same.
A consumer maximizes utility when she consumes at a point where a. the marginal utility of each good is the same
b. the marginal utility per dollar spent on each good is the same. c. the price of each good is the same. d. All of the above statements are true.
An advancement in technology will cause
a) the PPF to shift inwards towards the origin. b) the PPF to shift outwards away from the origin. c) the economy to move down along the PPF curve. d) the economy to move upwards along the PPF curve.
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.