Assume you have $1,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 92 at the end of the year, the real value of your savings is closest to
A. $1,092.
B. $920.
C. $1,087.
D. $908.
Answer: C
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Some economists believe that when workers and firms expect a recessionary monetary policy, _____. a. they act so as to prevent the price level from increasing b. their actions lead to a further increase in output c. they are likely to negotiate for relatively lower wages
d. the monetary authority is forced to cancel its planned recessionary policy e. both output and employment increase even more than was originally planned
The Federal Reserve System:
a. was created by and is owned by the government. b. pursues independent fiscal policy at the behest of Congress. c. never acts to control inflation. d. pursues an independent monetary policy which can conflict with the government's economic policy. e. only acts to lower taxes and increase spending when there are recessionary tendencies in the economy.
Which of the following statements best describes the domestic beneficiaries of international trade?
a. Over time, the average person gains from international trade as a worker, but not as a consumer. b. Over time, the average person gains from international trade, both as a worker and as a consumer. c. Over time, the average person gains from international trade as a consumer, but not as a worker. d. Over time, the average person does not gain from international trade, either as a worker or as a consumer.
Economic growth and development in LDCs are low because many of them lack:
a. saving. b. infrastructure. c. a political environment favorable to growth. d. All of the answers are correct.