Headline inflation:
A. includes all of the goods the average consumer buys.
B. is measured using core inflation with the prices of food and gasoline added in.
C. is based on the CPI basket of goods.
D. All of these statements are true.
Answer: D
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Refer to Figure 10-9. If the consumer has $240 to spend on DVDs and CDs, what is the price of a CD if the budget constraint is BC2?
A) $8 B) $10 C) $20 D) $40
Who stands to gain as a result of unanticipated inflation?
A) creditors B) debtors C) persons living on a fixed income D) retired individuals
Consider a portfolio with three stocks, each with the same value. The three stocks have standard deviations of 20%, 40%, and 90%. The standard deviation of this portfolio is
a. no greater than 50%. b. less than 20%. c. exactly 40%. d. more than 90%.
If expected inflation increases, which of the following shifts right?
a. both the short-run and the long-run Phillips curves b. the short-run but not the long-run Phillips curve c. the long-run but not the short-run Phillips curve d. neither the long-run nor the short-run Phillips curve