When the president says that "High inflation rates are a much more serious economic problem than high unemployment rates," it is an example of
A) a normative statement.
B) an empirically proven fact.
C) a positive statement.
D) an irrational argument.
Answer: A
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When output is below potential and the policy rate has hit the floor of zero, if policymakers do nothing, output will ________ and inflation will ________
A) rise; fall B) fall; fall C) fall; rise D) rise; rise
Which of the following is true about inflation?
a. Inflation is favored by the poor because they have less money. b. Inflation is more damaging if it is anticipated. c. Inflation is more damaging to the poor because they have less money. d. Those who lend money at a rate below the rate of inflation suffer economic losses. e. If people can accurately anticipate inflation, no one gains or loses from it.
The earnings of all employees in a competitive economy would be equal if
a. all individuals were homogeneous. b. all jobs were equally attractive. c. workers were perfectly mobile among jobs. d. all of the above are true.
All of the following are consequences of a government's having to deal with a "debt crisis", except:
A. Very restricted ability to borrow money B. Being forced to drastically raise taxes C. Being forced to make drastic cuts in spending D. Being forced to make huge increases in government spending