The GDP deflator measures
A) the quality of the goods and services in GDP.
B) the quantity level.
C) nominal GDP.
D) real GDP.
E) the price level.
E
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If you feel you are better off because you receive a 10 percent raise even when the price level also increases by 10 percent, then you are a victim of the
A) real purchasing power effect. B) money income effect. C) real income effect. D) money illusion.
The statement "If Harvey goes to Subway then Candice should go to Subway, and if Harvey goes to Taco Bell, then Candice should go to Taco Bell" is an example of locating equilibria by using the technique known as
A) mutual interdependence. B) cooperative coordination. C) cell-by-cell inspection. D) best-response analysis.
If a perfectly competitive firm is facing a situation where the price of its product is lower than the average total cost, which of the following statements is true?
A. Other firms will want to enter the industry because of the economic profits generated by the firm. B. The firm may earn economic profits in the long run if it expands its plant in order to exploit economies of scale. C. The firm may be earning some accounting profits, but less than what it could earn elsewhere. D. The firm is generating a loss, and if things are not expected to improve the firm will leave the industry.
Identify four factors that will cause the value of call options to increase.
What will be an ideal response?