Questions from Macroeconomics

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: Over a long period of time, the price of a candy

Over a long period of time, the price of a candy bar rose from $0.20 to $1.20. Over the same period, the CPI rose from 150 to 300. Adjusted for overall inflation, how much did the price of the candy b...

Q: Because capital is subject to diminishing returns, higher saving and investment

Because capital is subject to diminishing returns, higher saving and investment do not lead to higher a. income in the long run. b. income in the short run. c. growth in the long run. d. growth in the...

Q: What is the opportunity cost of investing in capital? Do you

What is the opportunity cost of investing in capital? Do you think a country can overinvest in capital? What is the opportunity cost of investing in human capital? Do you think a country can overinves...

Q: Explain how higher saving leads to a higher standard of living.

Explain how higher saving leads to a higher standard of living. What might deter a policymaker from trying to raise the rate of saving?

Q: Adam Smith’s “invisible hand” refers to a. the

Adam Smith’s “invisible hand” refers to a. the subtle and often hidden methods that businesses use to profit at consumers’ expense. b. the ability of free markets to reach desirable outcomes, despite...

Q: The company that you manage has invested $5 million in developing

The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your sales people report that the introduction of compe...

Q: Why isn’t trade among countries like a game with some winners and

Why isn’t trade among countries like a game with some winners and some losers?

Q: Define the price elasticity of demand. • Explain the relationship between

Define the price elasticity of demand. • Explain the relationship between total revenue and the price elasticity of demand.

Q: All of the following topics fall within the study of microeconomics EXCEPT

All of the following topics fall within the study of microeconomics EXCEPT a. the impact of cigarette taxes on the smoking behavior of teenagers. b. the role of Microsoft’s market power in the pricing...