Suppose the price level this year is 150 and the price level last year was 125. The inflation rate between last year and this year was
A) 20 percent.
B) 2 percent.
C) 16.6 percent.
D) 1.6 percent.
A
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Japanese electronics exports were hurt in 2008 as a result of the recession. How would this decrease in exports have affected Japan's aggregate demand curve?
A) The aggregate demand curve would have shifted to the right. B) The aggregate demand curve would not have shifted, but there would have been a movement up the aggregate demand curve. C) The aggregate demand curve would have shifted to the left. D) The aggregate demand curve would not have shifted, but there would have been a movement down the aggregate demand curve.
Which of the following is not a function performed by the Federal Reserve?
a) To clear checks. b) To maintain the money supply. c) To establish more effective supervision of the banking system in the United States. d) To keep interest rates low.
As the wage rate rises, firms will respond by
A. selling more output to cover the additional costs of the labor force. B. hiring fewer workers because the labor demand curve slopes downward. C. selling the same amount of output, but passing on the higher labor costs to the customer. D. hiring more workers because a higher wage rate will make workers work harder.
Shutting down a firm's operation and quitting production is equivalent to exiting the industry.
Answer the following statement true (T) or false (F)