If the CPI declines from one year to the next, then the following statements are true, except:
A. There is deflation
B. The inflation rate is negative
C. The average price level is decreasing
D. The CPI turns negative in the next year
D. The CPI turns negative in the next year
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About how much U.S. and European trade is intra-industry?
a. 40% b. 50% c. 60% d. 70%
Fed purchases of bonds from the public, called open market operations:
A. tend to increase reserves in the system leading to reductions in interest rates. B. tend to reduce the money supply because the bonds are expensive to purchase. C. tend to reduce reserves in the banking system because all the Fed gets is more bonds. D. tend to increase bond prices but generally have no effect on bank reserves.
In an open economy,
a. net capital outflow = imports. b. net capital outflow = net exports. c. net capital outflow = exports. d. None of the above is correct.
Suppose John Smith pays $100 to Thomas Jefferson. What does this do to GDP?
A. We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. B. We can say with certainty that the GDP has increased by $100. C. We need more information to determine whether GDP has changed. D. We can say with certainty that the GDP has increased, but we cannot determine the amount.