Suppose the nominal price of gasoline was $0.90 per gallon in 1987. To convert this value to the real price of 1987 gasoline in 2012 dollars, we should:
A) multiply by the 1987 CPI and divide by the 2012 CPI.
B) multiply by the 2012 CPI and divide by the 1987 CPI.
C) not do anything because this is the real price in 2012 dollars.
D) none of the above
B
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In the above figure, the production of 25 guitars and 25 ukuleles is
A) efficient production. B) inefficient production. C) impossible production. D) not possible since production always occurs along the PPC.
All of the following are private costs of operating an automobile EXCEPT
A) gasoline for the car. B) depreciation of the vehicle. C) car insurance. D) harm to the environment from emissions.
In a simplified banking system in which all banks are subject to a 10 percent required reserve ratio, a $1,000 open market sale by the Fed to a bank would cause the money supply to:
a. increase by $1,000. b. increase by $100,000. c. decrease by $10,000. d. decrease by $1,000. e. remain unchanged.
The Shadow Open Market Committee, a group of economists with the Monetarist point of view, calls for a reduction in the money supply. They must be concerned about ________.
A. rising rates of inflation B. new technological breakthroughs that might increase the growth rate of real GDP C. falling levels of real GDP D. high levels of unemployment