Blog

All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?

Other things the same, when the interest rate rises:

Grapes are considered intermediate goods:

Suppose a basket of goods and services has been selected to calculate the CPI and 2009 has been selected as the base year. In 2007, the basket’s cost was $64; in 2009, the basket’s cost was $68; and in 2011, the basket’s cost was $70. The value of the CPI in 2011 was:

In the equation Y= C + I + G + NX,

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study:

The GDP deflator for years subsequent to the base year measures the change in:

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home.  Her purchase increases:

US GDP