________ inflation is more stable than ________ inflation, because it excludes food and gasoline prices.
A. Core; headline
B. Nominal; core
C. Headline; core
D. Core; nominal
Answer: A
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Labor productivity can be increased if
A) the government mandates it. B) the standard of living declines. C) people spend less time developing skills before entering the workforce. D) there is an increase in capital goods.
The monetary policy instrument the Federal Reserve chooses to use is the
A) federal funds rate. B) monetary base. C) fixed exchange rate. D) discount rate. E) flexible exchange rate.
The above figure shows the U.S. market for 1 carat diamonds. Area C is the
A) decrease in consumer surplus due to the import quota. B) importers' profit from the quota. C) deadweight loss from the import quota. D) increase in producer surplus due to the import quota. E) gain in total surplus due to the import quota.
Monetary policy has no effect on the equilibrium interest rate if
A) the inflation rate is zero. B) the economy is in the liquidity trap. C) velocity is constant. D) the economy is at full employment.