The inflation rate is:
A. the percentage change in the overall price level.
B. is not something that can be accurately measured with the CPI.
C. the central concept in microeconomics.
D. a measure of the rate of increase in the cost of imported goods.
Answer: A
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If the money multiplier is 2.4 and the Fed buys $8 million in securities on the open market, transaction deposits could potentially
A) decrease by $16.5 million. B) increase by $8 million. C) decrease by $19.2 million. D) increase by $19.2 million.
An input's marginal revenue product is given by
a. the input's marginal expense times marginal revenue. b. the input's marginal expense times the input's marginal physical productivity. c. marginal revenue times the number of units employed. d. the input's marginal physical productivity times marginal revenue of the firm's output.
The investment component of GDP measures spending on
a. financial assets such as stocks and bonds. During recessions it declines by a relatively large amount. b. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively large amount. c. financial assets such as stocks and bonds. During recessions it declines by a relatively small amount. d. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively small amount.
The GDP deflator in year 3 is 85 using year 1 as a base year. This means that, on average, the price of goods and services is
A. 7.5% higher in year 3 than in year 1. B. 15% higher in year 1 than in year 3. C. 7.5% higher in year 1 than in year 3. D. 15% higher in year 3 than in year 1.