Questions from General Economics

Q: The largest component in the basket of goods and services used to

The largest component in the basket of goods and services used to compute the CPI is a. food and beverages. b. housing. c. medical care. d. apparel.

Q: If a Pennsylvania gun manufacturer raises the price of rifles it sells

If a Pennsylvania gun manufacturer raises the price of rifles it sells to the U.S. Army, its price hikes will increase a. both the CPI and the GDP deflator. b. neither the CPI nor the GDP deflator. c....

Q: Because consumers can sometimes substitute cheaper goods for those that have risen

Because consumers can sometimes substitute cheaper goods for those that have risen in price, a. the CPI overstates inflation. b. the CPI understates inflation. c. the GDP deflator overstates inflation...

Q: If the consumer price index is 200 in year 1980 and 300

If the consumer price index is 200 in year 1980 and 300 today, then $600 in 1980 has the same purchasing power as _________ today. a. $400 b. $500 c. $700 d. $900

Q: You deposit $2,000 in a savings account, and

You deposit $2,000 in a savings account, and a year later you have $2,100. Meanwhile, the consumer price index rises from 200 to 204. In this case, the nominal interest rate is _________ percent, and...

Q: An economy is operating with output $400 billion below its natural

An economy is operating with output $400 billion below its natural level, and fiscal policymakers want to close this recessionary gap. The central bank agree to adjust the money supply to hold the int...

Q: Henry Ford paid his workers $5 a day in 1914.

Henry Ford paid his workers $5 a day in 1914. If the consumer price index was 10 in 1914 and 230 in 2012, how much is the Ford paycheck worth in 2012 dollars?

Q: Why would removing a trade restriction, such as a tariff,

Why would removing a trade restriction, such as a tariff, lead to more rapid economic growth?

Q: How does the rate of population growth influence the level of GDP

How does the rate of population growth influence the level of GDP per person?

Q: Describe two ways the U.S. government tries to encourage

Describe two ways the U.S. government tries to encourage advances in technological knowledge.