The country of Old Jersey produces milk and butter, and it has published the following macroeconomic data, where quantities are in gallons and prices are dollars per gallon.
Between Year 1 and Year 2, nominal GDP grew by
A. 60.0%.
B. 83.3%.
C. 190.0%.
D. 65.5%.
Answer: C
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The fact the consumers substitute one good for another when prices change is
A) taken into account by the fixed market basket used in calculating the CPI. B) not taken into account by the fixed market basket used in calculating the CPI. C) not important to economists. D) a reason why the CPI is used to calculate inflation rates. E) a reason why the CPI understates the actual change in the cost of living.
"Tying" is a form of price discrimination which involves a buyer
A) agreeing to purchase a product at a fixed price regardless of the amount purchased. B) paying different prices based on the amounts of a product purchased. C) required to buy one product in order to purchase some other product. D) All of the above
Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills is called
a. the natural rate of unemployment. b. cyclical unemployment. c. structural unemployment. d. frictional unemployment.
If the French government increases its expenditures and reduces taxes, then France's interest rate
a. and its exchange rate rise. b. rises and its exchange rate falls. c. falls and its exchange rate rises. d. and its exchange rate fall.