What does the inflation rate measure, and what is deflation?
What will be an ideal response?
The inflation rate measures the percentage increase in the price level from one year to the next. Deflation is a sustained decrease in the price level.
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Which of the following is an example of a club good?
A) a lighthouse B) burritos C) a high school football game D) redwood forests
If an increase in the price of peaches reduces the demand for cream, this indicates that peaches and cream are
a. normal goods. b. inferior goods. c. complements. d. substitutes.
Which of the following will cause the demand for loanable funds to increase?
A. Households increase their rate of savings. B. The expected rate of return increases. C. The cost of funds increases. D. The expected profitability of a project declines.
Profit-maximizing firms in a competitive market produce an output level where
a. marginal cost equals marginal revenue. b. marginal cost equals average total cost. c. marginal revenue is increasing. d. price is less than marginal revenue.