Assume an economy produces only hamburgers and hotdogs and the base year is 2005. Quantity producedPrices 2005200620052006Hamburgers2,0003,0002$3Hotdogs3,0004,0001$1.50Given the data in the table above, what is the value of nominal GDP in 2006?
A. $15,000
B. $10,500
C. $ 5,000
D. $ 7,000
Answer: A
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A commodity money standard exists when exchange rates are:
a. artificially pegged to the price of oil. b. fixed in terms of gold, thus creating flexible exchange rates between countries. c. fixed in terms of gold, thus creating fixed exchange rates between countries. d. allowed to fluctuate based on the values of different currencies. e. fixed, based on the values of different currencies, in terms of some commodity.
What is meant by the expression, "There is too much money chasing too few goods"?
a. People spend too much time chasing after money. b. An expansion in the supply of money relative to the availability of goods and services is causing an increase in the general level of prices. c. The value of money will tend to decline when the supply of gold increases. d. People would be better off if the monetary authorities increased the supply of money more rapidly.
Monopolistic competition is characterized by firms:
A. Producing differentiated products B. Making economic profits in the long run C. Producing at optimal productive efficiency D. Producing where price equals marginal cost