Lower rates of inflation increase planned spending because:
A. the reduction in wealth, resulting from the reduced real value of money, restrains spending.
B. the Fed reacts to the lower inflation by lowering interest rates.
C. resources are redistributed from high-spending households to low-spending households.
D. the prices of domestic goods sold abroad increase (with a constant exchange rate).
Answer: B
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According to the "Rule of 70," it will take 4 years for real GDP per capita to double when the growth rate of real GDP per capita is
A) 4 percent. B) 12.25 percent. C) 17.5 percent. D) 28 percent.
According to Okun's law, if full-employment output is $5000 billion, then each percentage point of unemployment sustained for one year reduces output by
A) $50 billion. B) $100 billion. C) $150 billion. D) $200 billion.
The graph shown demonstrates a tax on buyers. What is the amount of tax revenue being generated from the tax?
A. $72
B. $36
C. $48
D. $96
Minimum wages are:
A. not very controversial. B. always needed to guarantee workers an acceptable standard of living. C. a form of government interference in the free market. D. only enforceable at the federal level.