Related to the Economics in Practice on p. 455: The Consumer Price Index in the United States was 207.3 in 2007, 215.3 in 2008 and 214.5 in 2009. If a retiree's pension is tied to the CPI, his monthly pension check would have increased from ________, and decreased from ________.
A. 2007 to 2009; 2007 to 2008
B. 2007 to 2008; 2008 to 2009
C. 2007 to 2008; 2007 to 2009
D. 2008 to 2009; 2007 to 2008
Answer: B
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During an economic downturn, Keynes argued that businesses would:
A. not increase spending because of the sharp rise in interest rates. B. not increase spending even if interest rates fell all the way to zero. C. increase spending because interest rates would fall to zero. D. increase spending because of the sharp rise in interest rates.
If you expect the inflation rate to be 4 percent next year and a one year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is
A) -3 percent. B) -2 percent. C) 3 percent. D) 7 percent.
The aggregate supply curve will be vertical when:
a. output can be increased without an increase in the price level. b. the economy is operating at full-employment capacity. c. output and price level rise together. d. the aggregate demand curve is shifting to the left. e. aggregate demand is absent.
Which of the following items is included in U.S. GDP?
a. final goods and services that are purchased by the U.S. federal government b. intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP accounting period c. goods and services produced by foreign citizens working in the U.S. d. All of the above are included in U.S. GDP.