The Consumer Price Index is useful in calculating the average level of inflation, but it fails to capture the actual inflation experienced by any particular economic group
a. True
b. False
Indicate whether the statement is true or false
True
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If the Federal Reserve wants to increase the money supply, it should:
A. increase reserve requirements. B. increase the interest that it pays on reserves. C. increase the discount rate. D. conduct open-market purchases.
If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each, then we see that
A) exports must be less than imports. B) exports must be more than imports. C) the error is due to rounding. D) we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent. E) GDP can be over 100 percent because it is "gross" rather than "net."
Someone saying that he wants to lose weight, but ordering dessert is an example of:
A. rational decision making. B. rational behavior. C. irrational behavior. D. utility-maximizing behavior.
If the U.S. government were to note that because drug companies can sell their drugs in Canada and make a profit at those regulated prices and impose a similar set of regulations in the U.S., this would have the effect of
A. raising the price of drugs in the U.S. B. eliminating all profit for drug companies. C. decreasing the motivation for U.S. drug companies to innovate in the future. D. increasing the motivation for Canadian drug companies to innovate in the future.