Unemployment will be at its target rate when actual inflation is:
A. 3 percent and expected inflation is 3 percent.
B. 0 percent and expected inflation is 3 percent.
C. 3 percent and expected inflation is 0 percent.
D. 6 percent and expected inflation is 3 percent.
Answer: A
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When two goods are substitutes for each other, the cross price elasticity of demand
A) will be negative. B) will be zero. C) may be either positive or negative. D) will be positive.
Other things constant, which of the following will most likely cause the dollar to appreciate on the exchange rate market?
a. higher interest rates in the United States b. a relatively low rate of inflation in the United States c. high rates of income growth in Europe d. all of the above
Mass production is possible only if there is also __________________________.
Fill in the blank(s) with the appropriate word(s).
One reason most central bankers do not set an inflation target of zero is:
A. they believe it would cause price volatility. B. it is almost impossible to achieve. C. the central bank could hit the lower bound. D. none of the answers given is correct.