Refer to the information above. What is the level of consumption when the level of income is 850?
A) 375
B) 425
C) 450
D) 475
C
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If the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007, when the CPI was 172, then
A) the price of the soda was greater in real value in 1970 than in 2007. B) prices on average have increased 567 percent. C) the price of a soda has increased a greater percentage than the CPI. D) prices on average have increased 244 percent. E) the real price of a soda is the same in 1970 and 2007.
The cyclically adjusted budget deficit calculates the budget surplus or deficit at
A) potential GDP. B) average GDP. C) real GDP. D) nominal GDP.
The purchasing power parity theory is useful in making ____ predictions about exchange rates and their fluctuations
a. long-run b. intermediate-run c. medium-run d. short-run
When unemployment is above the natural rate,
A. the inflation rate falls. B. inflation rises. C. nominal wages decrease. D. wage-price spirals occur.