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(02.04 LC) The consumer price index tends to ________ the substitution of lower-priced goods, which has the effect of ________ inflation.

(06.03 MC) The United States and the countries of Europe are trading partners. If the average income of dollar holders increases, what should be the result in the market for the euro, the currency of many European countries?

(05.07 MC) Which of the following policies will have a positive impact on the growth of an economy in the long run?

(03.02 MC) Assume that the government of a country decides to give out tax refunds of $4.5 million to small domestic firms that are struggling. If the marginal propensity to save in the country is 0.25, then what is the maximum impact this measure will have on the GDP of the country?

(04.03 LC) The basic money supply, M1, is defined as the value of

(03.08 LC) The policy actions taken by the government in discretion do not have much impact on the economy. Which of the following are potential weaknesses of discretionary fiscal policies?

(02.07 MC) A country’s unemployment rate is extraordinarily low and inflation is beginning to rise sharply. Its real GDP growth is still positive but has started to slow down. Which point of the business cycle best describes this economy?

(02.06 MC) Use the data table to answer the question that follows. Year Nominal GDP GDP Deflator 2000 $100 billion 80 2001 $117 billion 90 2002 $135 billion 100 2003 $200 billion 160 2004 $225 billion 250 In which year was real gross domestic product the greatest?

(02.01 HC) Use the table to answer the question that follows. Wages received by employees $15 trillion Bonuses received by employees $6 trillion Rent on land $12 trillion Dividends earned by stockholders $8 trillion Profits earned by firms $19 trillion Interest received on capital $7 trillion Net income from abroad $13 trillion Calculate the GDP of the country according to the income approach.

(02.04 MC) Which of the following is true about the consumer price index (CPI) as an economic indicator?