If some specific prices fall, some relative prices rise, and average prices remain unchanged, there has been a period of
A. Disinflation.
B. Stable price levels.
C. Deflation.
D. Inflation.
Answer: B
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According to Utilitarian principles first discussed in the nineteenth century, fairness implies
A) equality of income. B) equality of opportunity. C) winner takes all. D) maximizing consumption.
Suppose we shopped for a basket of goods in 2000 and it cost $350 . Suppose the same basket of goods adds up to $385 in 2001 . If we use 2000 as a base year, what would be the 2001 CPI?
a. 35 b. 90 c. 100 d. 110 e. 135
The government of an economy must borrow money from the loanable funds market if the value of:
a. government expenditures is lower than the value of net taxes. b. government expenditures is higher than the value of net taxes. c. consumption expenditures is lower than the value of net taxes. d. investment expenditures is lower than the value of savings.
Whenever U.S. government spending increases, thereby increasing the demand for real balances and the rate of interest, the currency will appreciate and there is a potential for:
A) overshooting. B) crowding out. C) a Republican backlash. D) recession.