If the nominal gross domestic product (GDP) for a year is 5.4 trillion, and the real gross domestic product (GDP) for the same year is 3.6 trillion, the GDP price index is _____.
a. 0.667
b. 150
c. 66.67
d. 50
e. 33.33
QUESTION 2The American Recovery and Reinvestment Act, signed by President Barack Obama in 2009, aimed at:
a. stimulating the aggregate demand in the economy.
b. removing the supply bottlenecks in the economy.
c. closing an expansionary gap through a contractionary fiscal policy.
d. ensuring free trade flows across the world.
e. providing higher unemployment benefits to the residents of the economy.
QUESTION 3The monopsonistic employer hires more workers until marginal:
a. physical product is zero.
b. revenue product equals marginal factor cost.
c. revenue product equals the wage.
d. physical product equals the wage.
e. physical product equals marginal factor cost
QUESTION 4The consumer price index (CPI) _____ inflation because it includes an item in the market basket only after the product becomes _____.
a. overstates; unpopular
b. overstates; obsolete
c. overstates; widely used
d. understates; widely used
e. understates; obsolete
QUESTION 5The effectiveness of any stimulus program depends on:
a. the nature of the tax only
b. the size of the tax and spending multipliers
c. the nature of the tax and tax multipliers
d. the income group targeted
e. the marginal propensity to consume only
QUESTION 6Suppose a loaf of bread sold for 3.00 in 2008 . The price of bread then increases to 3.60 in 2009 . The price index for bread considering 2008 as the base year is _____.
a. 1.20
b. 83.33
c. 120
d. 100
e. 20
QUESTION 7If the wage rate in a monopsonistic industry is 15, the marginal factor cost will be:
a. 0.
b. 1.
c. 15.
d. greater than 15.
e. less than 15.
QUESTION 8Which of the following groups did Clinton target after his stimulus package failed in 1993?
a. High-income households
b. Low-income households
c. Foreign investors
d. Only industrial workers
e. Households with the lowest MPC
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