The price of digital watches was 40 in 2000 the base

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5. The price of digital watches was $40 in 2000 (the base year) and $16 in 2007 . Suppose the economy produces only watch, the price index for this economy in 2007 was VB # 19 and VC # 23 a. 15%. b. 108%. 40% . d. 62.5%. e. none of the above. Base period’s price is RGDP, and current year price is GDP. PIN = ( GDP RGDP ) × 100 = ( 16 40 ) × 100 = 40 . 2
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6. Which of the following actions does not increase or added to GDP? VB # 20 and VC # 24 7. Which of the following is not a phase of a typical real business cycle (the path of movement of actual RGDP around potential real output)? VB # 21 and VC # 25 8. A recession is most adequately defined as a period during which VB # 1 and VC # 7 9. Which of the following increases U.S. net exports? VB # 2 and VC # 8 a. Ravi buys a new Volvo station wagon produced in Switzerland. b. Palbo marries his Danish Secretary both living and working in U.S. The Moriera family from Brazil visits Disney World by buying U.S. dollars in exchange of their currency . d. Lars builds a hunting lodge in Canada using all Canadian made row materials. e. Ten thousand bottles of French champagne are used in the U.S. to welcome the new year. 10. Which of the following is not considered to be investment? VB # 3 and VC # 9 3
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11. Some years ago, the Department of Commerce published a statistical report that, in 1932, gross private business investment in the United States was $1 . 0 billion, while capital depreciation was $7 . 6 billion. We may conclude VB # 4 and VC # 10
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