One measure of the inflation rate is the
A) sum of the CPIs of adjacent years.
B) percentage change in the CPI of adjacent years.
C) percentage change in the Real GDP of adjacent years.
D) GDP minus the Real GDP in a year.
B
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An example of unplanned investment is
a. an unexpected fire requires that an entire factory be rebuilt. b. a bridge collapses and requires unexpected repair cost. c. machine tool companies are forced to install new equipment to be able to meet Japanese competition. d. None of these.
Expansionary fiscal policy normally lowers interest rates
a. True b. False Indicate whether the statement is true or false
Which of the following statements is not correct?
A. A price ceiling set at $9 would result in a surplus. B.A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. C.A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding. D. A price floor set at $11 would result in a surplus.
Advertising
a. provides information about products, including prices and seller locations. b. has been proven to increase competition and reduce prices compared to markets without advertising. c. signals quality to consumers, because advertising is expensive. d. All of the above are correct.