For an economy to eliminate inflation once people have begun to anticipate it, _____
a. a passive policy approach must be followed
b. the monetary authorities must announce their decisions
c. actual inflation must be greater than anticipated inflation
d. cold turkey solutions that lead to further inflation must be avoided
e. a recession will have to be endured until expectations have been reduced
e
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The rational-ignorance effect refers to the
a. lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. b. fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. c. lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. d. problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.
The long-run aggregate supply curve represents the level of output possible if the economy:
A. has a zero inflation rate. B. has no structural unemployment. C. is operating at full capacity. D. is operating at an unemployment rate of zero.
Refer to the information provided in Figure 8.3 below to answer the question(s) that follow. 
Figure 8.3
Refer to Figure 8.3. The marginal cost of the eleventh basketball is
A. less than $1. B. $1. C. $2. D. greater than $2.
The income elasticity of demand for low-quality beef is -2. Thus, a 5% increase in the quantity of low-quality beef demanded
A. is the result of a decrease in income of 10%. B. is the result of a decrease in income of 2.5%. C. is the result of an increase in income of 2.5%. D. is unrelated to any change in income.