You earned $30,000 in 2009, and your salary rose to $80,000 in 2018. If the CPI rose from 82 to 202 between 2009 and 2018, which of the following is true?
A) There was deflation between 2009 and 2018.
B) The purchasing power of your salary fell between 2009 and 2018.
C) The purchasing power of your salary remained constant between 2009 and 2018.
D) The purchasing power of your salary increased between 2009 and 2018.
Answer: D
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Refer to the table above. For which of the following choices is the marginal total cost the lowest?
A) Choosing factory Close over factory Far B) Choosing factory Far over factory Very Far C) Choosing factory Very Close over factory Close D) Choosing factory Close over factory Very Far
If there is a sudden increase in government spending, which of the following should the Fed do if it wants to keep output unchanged?
a. Do nothing, since the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, since output usually does not change when government spending increases d. Decrease the required reserve ratio e. Buy bonds in the open market
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Suppose you bought a Volkswagen Beetle for 12,000 euros, and $1 would buy 0.90 euros. You would find the cost of the car in dollars and cents by
A. dividing 12,000 by 1.11. B. dividing 1.11 by 12,000. C. dividing 12,000 by 0.90. D. dividing 0.90 by 12,000.