In the long run, if we ignore changes in velocity, inflation will:
A. equal money growth plus the growth in potential output.
B. equal money growth less the growth in potential output.
C. equal the rate of money growth.
D. be zero.
Answer: B
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Gross domestic product can be thought of as a measure of
A) the national money supply. B) national income. C) national welfare. D) the national value of all legal exchanges. E) none of the above.
The demand curve for microwave popcorn is linear. Which of the following definitely makes the demand for microwave popcorn more inelastic?
A) a decrease in the price of microwave popcorn B) an increase in the price of microwave popcorn C) an increase in income D) a decrease in income
An increasing-cost industry is so named because of the positive slope of which curve?
A) Each firm's short-run average cost curve B) Each firm's short-run marginal cost curve C) Each firm's long-run average cost curve D) Each firm's long-run marginal cost curve E) The industry's long-run supply curve
Wilma values a decorative garden rock at $15, while Fred values it at $10 . The price of a decorative garden rock is $9 . If the government imposes a $2 tax per decorative garden rock and the price of the rock rises to $11, what part of the deadweight loss comes from Wilma, and what part comes from Fred?
a. none comes from Wilma; $1 comes from Fred b. none comes from Wilma; $3 comes from Fred c. $2 comes from Wilma; $1 comes from Fred d. $4 comes from Wilma; $3 comes from Fred