When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the two inflation rates
A) move in opposite directions.
B) remained constant over the forty year period after 1979.
C) steadily increased over the forty year period after 1979.
D) move up and down in similar but not identical ways.
E) both fluctuate, but the fluctuations have little relationship to each other.
D
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In analyzing human decision and action, economists assume that
A. there are no scarce resources in the economy. B. people's behavior reflects rational self-interest. C. scarcity is more important than choice. D. costs are more important than benefits.
Which of the following statements is a defining feature of a corporation?
a. The owners of a corporation face unlimited liability on debts. b. A corporation owns and operates units only in foreign countries. c. A corporation is created by a verbal agreement. d. A corporation that is based on a verbal agreement is also recognized by State law. e. A corporation has a legal identity that is separate from that of its owners.
What's the tax multiplier if MPC = 0.75?
a. –4 b. –3 c. 0.33 d. 3 e. 4
When the money market is drawn with the value of money on the vertical axis, if the price level is above the equilibrium level, there is an
a. excess demand for money, so the price level will rise. b. excess demand for money, so the price level will fall. c. excess supply of money, so the price level will rise. d. excess supply of money, so the price level will fall.