What is the distinction between nominal GDP and real GDP?
What will be an ideal response?
Nominal GDP is the value of final goods and services produced in a given year valued at the prices of that year. Real GDP is the value of final goods and services produced in a given year when valued at the prices of a reference base year. By comparing the value of production in the two years at the same prices, we reveal the change in production.
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The monetary liabilities of the Federal Reserve include
A) securities and loans to financial institutions. B) currency in circulation and reserves. C) securities and reserves. D) currency in circulation and loans to financial institutions.
A risk-averse manager is hired to run a firm for shareholders. If shareholders cannot observe the manager's effort, which would be the best employment contract?
a. a high-powered incentive contract to elicit maximum effort. b. a fixed salary. c. a moderately powered incentive scheme that elicits some effort without exposing the manager to too much risk. d. an incentive scheme that provides maximum incentives and maximum insurance.
Figure 17-10
Refer to . Consumer surplus with the tariff is
a.
A.
b.
A + B.
c.
A + C + G.
d.
A + B + C + D +E + F.
Consider a market for product X where 75 percent of the stores charge $500 and 25 percent charge $450. Compute the expected benefit from an additional search when the first search results in a price of $500.
A. $12.50 B. $50 C. $37.50 D. $500