The Federal Reserve focuses on the inflation rate based on the ________ rather than the CPI; to measure the underlying trend in inflation, it focuses on the ________.
A. GDP deflator; overall GDP deflator
B. PCE price index; core PCE price index
C. PCE price index; overall PCE price index
D. GDP deflator; core GDP deflator
Answer: B
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A government budget deficit is financed by a combination of
A) saving rising relative to domestic investment and imports rising relative to exports. B) saving rising relative to domestic investments and exports rising relative to imports. C) domestic investment rising relative to saving and imports rising relative to exports. D) domestic investment rising relative to saving and exports rising relative to imports.
Adam Smith is the father of modern economics
a. True b. False Indicate whether the statement is true or false
The budget deficit or surplus in any given year, adjusted for what it would have been if the economy were producing at potential GDP, is called
a. an automatic stabilizer. b. a discretionary fiscal policy. c. a standardized employment budget. d. a countercyclical employment budget.
The curve that best helps a firm determine which output level will maximize profits is the
a. total product curve b. marginal product curve c. average total cost curve d. marginal cost curve e. average variable cost curve