The CPI and GDP deflator
What will be an ideal response?
both measure inflation but have different numbers
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After the September 11, 2001 attacks on the World Trade Center, the supply of downtown office space in Manhattan was dramatically reduced. Forecasters predicted that the equilibrium price would rise, but in fact the price fell
What are some factors that could explain the fall in the equilibrium price, which the forecasters failed to take into account? A) Demand for office space fell due to quality-of-life concerns. B) The economic slowdown caused demand for office space to fall. C) both A and B D) none of the above
The only way that a society can produce outside the production possibilities curve is
A) through economic growth. B) by producing efficiently. C) by obeying the Law of Increasing Additional Cost. D) to use the concept of opportunity cost.
Which one of the following is part of the M2 definition of the money supply, but not part of M1?
a. Checkable deposits. b. Currency held in banks. c. Currency in circulation. d. Small time deposits of less than $100,000.
In one year, a weapons plant can manufacture either 1,000 more guns or 50 more tanks. The plant's opportunity cost of an extra tank is approximately
a. 20 guns b. 50 guns c. 50 tanks d. 1/50 of a tank e. 1/50 of a gun