Which of the following statements concerning the history of U.S. inflation is not correct?
a. Prices rose at an average annual rate of about 3.6 percent over the last 80 years.
b. There was about a 17-fold increase in the price level over the last 80 years.
c. Inflation in the 1970s was below the average over the last 80 years.
d. The United States has experienced periods of deflation.
c
You might also like to view...
The opportunity cost of a good is the same as its
A) money price. B) relative price. C) price index. D) none of the above.
If you expect the inflation rate to be 12 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is
A) -5 percent. B) -2 percent. C) 2 percent. D) 12 percent.
Increases in interest rates
A) reduce borrowers' net worth. B) reduce lenders' net worth. C) increase the present value of borrowers' assets. D) raise the cost to businesses of internal funding.
"Expansionary fiscal policy is always 100 percent effective when the short-run aggregate supply curve is horizontal." Is this statement TRUE?
A) yes, because theoretically nothing else can offset the effects of fiscal policy B) yes, when the long-run aggregate supply curve is horizontal too C) no, because crowding out could take place D) no, because the increased spending may cause the price level to increase