When the inflation rate exceeds the expected rate, the economy behaves like it does in a ________ inflation: The price level is higher than expected and real GDP ________ potential GDP.
Fill in the blank(s) with the appropriate word(s)
Answer: Demand-pull; rises above
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Which of the following statements about the concept of opportunity cost is true?
A. The opportunity cost of a decision is the cost of all possible alternatives to the good produced. B. Many decisions do not involve an opportunity cost. C. If you have an economics final and an American history final tomorrow, the opportunity cost of studying five hours for your economics exam is the five hours you cannot study for your history exam. D. The opportunity cost of a college education at a school where you have to drive 100 miles per week is the cost and maintenance of owning an automobile to drive to and from school.
Repurchase agreements are often used to
A) increase bank reserves permanently. B) increase bank reserves temporarily. C) reduce bank reserves permanently. D) reduce bank reserves temporarily.
Bert and Ernie are noncolluding oligopolists. If both choose a high price strategy, each makes $40 in profits; if both choose a low price strategy, each makes $30 in profits. If Bert chooses a high price strategy and Ernie chooses a low price strategy, Bert makes $20 in profits and Ernie makes $60 in profits, while if Bert chooses a low price strategy and Ernie chooses a high price strategy, Bert
makes $60 in profits and Ernie makes $20 in profits. Which combination of pricing strategies would you expect Bert and Ernie to adopt if they act independently? a. Both choose a high price strategy. b. Both choose a low price strategy. c. Bert chooses a high price strategy and Ernie chooses a low price strategy. d. Bert chooses a low price strategy and Ernie chooses a high price strategy.
The "most favored nation principle" means:
a. that member countries can enter into exclusive favorable agreements with some countries. b. that member countries are barred from forming agreements outside their geographic vicinity. c. that member countries must apply the same low tariffs to all WTO member countries. d. that member countries must apply differential tariffs on imports from non-WTO countries.