Inflation can be defined as
A) an increase in the purchasing power of money.
B) a decrease in the purchasing power of money.
C) no change in the purchasing power of money.
D) an increase in real income.
B
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Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases aggregate spending on domestic goods shifts the AD curve to the right.
A) I only B) II only C) Both I and II D) Neither I nor II
Fixing the insolvency problem caused by the Great Recession, the government was reluctant to infuse equity into financial institutions because:
a. It would transfer the problem to the government but may not solve the underlying causes. b. Equity infusions had to be funded, and the government already had a major debt problem. c.The government could be accused of nationalizing the U.S. financial system. d. All of the above.
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?
a. the cost of mustard b. the cost of hotdog buns c. wages paid to workers who sell hot dogs d. the cost of bookkeeping services
In the short-run, if the Federal Reserve increases interest rates, then consumption and investment ________, planned aggregate expenditure ________, and short-run equilibrium output ________.
A. increase; decreases; decreases B. decrease; decreases; decreases C. increase; increases; increases D. increase; increases; decreases