If the price index is now 120, it means:

a. prices are 120 percent higher than in the base year.
b. prices are 20 percent higher than in the base year.
c. prices are 1.2 percent higher than in the base year.
d. nominal GDP will be less than real GDP.


b

Economics

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The evidence from banking crises in other countries indicates that

A) deposit insurance is to blame in each country. B) a government safety net for depositors need not increase moral hazard. C) regulatory forbearance never leads to problems. D) deregulation combined with poor regulatory supervision raises moral hazard incentives.

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The Friedman natural rate theory is built upon

A) rational expectations. B) adaptive expectations. C) flexible wages and prices. D) the assumption of one Phillips curve. E) b and c

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If U.S. real GDP increases by 3.3 percent, we can infer that the United States experienced:

A. a recession B. an expansion C. a depression D. a trough

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The classical view of the labor market holds that unemployment in the economy consists of frictional and structural unemployment.

Answer the following statement true (T) or false (F)

Economics