Which of the following would be included in the GDP Price Index but not in the Consumer Price Index?
a. The price of a Chrysler automobile
b. The price of a fighter aircraft
c. The price of a used computer
d. The price of a tube of toothpaste
e. The price of a bottle of shampoo
B
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The Keynesian theory of money demand predicts that people will increase their money holdings if they believe that
A) interest rates are about to fall. B) bond prices are about to rise. C) expected inflation is about to fall. D) bond prices are about to fall.
One reaction of firms to the adverse selection problem is to
A) rely on internal funds to finance investment. B) use the stock market rather than the bond market to raise funds. C) use the bond market rather than the stock market to raise funds. D) borrow long-term rather than short-term.
Engaging in international trade has all of the following effects except:
A. altering prices in different countries. B. influencing labor markets in different countries. C. increasing number of goods and services we can consumer in different countries. D. it makes use of resources less efficient.
Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are
a. complementary goods. b. normal goods. c. inferior goods. d. substitute goods.