The GDP deflator:
A) measures the price changes of a fixed basket of goods and services.
B) measures the price changes of all final goods and services produced.
C) measures the price changes of just goods consumed by the household sector.
D) none of the above.
B
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Suppose the demand function for a good is expressed as Q = 100 - 4p. If the good currently sells for $10, then the price elasticity of demand equals
A) -1.5. B) -0.67. C) -4. D) -2.5.
The sum of the possible outcomes of a gamble multiplied by their respective probabilities is known as:
A. the expected value of the gamble. B. a fair gamble. C. the variance of the gamble. D. a better-than-fair gamble.
Which of the following is an example of product differentiation?
A. Two shampoos differ only in their labels, but consumers pay $0.20 more for the label they recognize. B. Mills produce softwood and hardwood, but the two are used for different purposes. C. Consumers substitute SUVs for cars because SUVs accommodate more passengers. D. Sugar can be made from sugar beets or sugar cane, and consumers cannot tell the difference.
The argument that developing countries should nurture their domestic industries by protecting them from foreign competition is known as
A) preservation of the home market. B) the escape clause hypothesis. C) the earth destruction hypothesis. D) institutional fair trade policy.