When calculating real GDP, the reference base year
A) allows us to account for changes in GNP compared to GDP.
B) always reduces the value of GDP compared to GNP.
C) allows us to calculate the value of the goods and services in terms of prices of that base year.
D) usually increases the value of GNP compared to GDP.
E) allows us to increase the value of goods and services.
C
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The local banking industry currently has a Herfindahl-Hirschman index (HHI) value of 2175 and two of the competing banks have considered merging. Because the merger would raise the HHI by 25 points, the Federal Trade Commission would likely
A) challenge the merger. B) not challenge the merger. C) allow the merger under the condition that HHI does not rise by more than 25 points as promised. D) allow the merger under the condition that the HHI remain at the premerger level of 2175.
If a 10-year Treasury bond pays 1.5% and a 10-year corporate bond pays 6.0%, what is the interest rate spread on this particular corporate bond?
a. 4.0% b. 4.5% c. 7.5% d. 9.0%