The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is
A) 5% higher in year 2 than in year 1. B) 105% higher in year 1 than in year 2.
C) 105% higher in year 2 than in year 1. D) 5% higher in year 1 than in year 2.
A
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The supply curve for housing in the very short run is likely to be
A) very elastic. B) very inelastic. C) unit-elastic elastic. D) perfectly elastic.
Suppose the index of leading economic indicators begins to decline for several months. Which of the following economic events will likely follow?
A. a recession B. severe inflation C. greater employment D. higher investment
When economic profits are negative, accounting profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.
When the Fed buys U.S. government securities from a bank, that bank's excess reserves and required reserves increase but total reserves decrease
a. True b. False Indicate whether the statement is true or false