Exhibit 17-1 Inflation and unemployment rates
In Exhibit 17-1, when the unemployment rate goes from 9 percent to 1.5 percent, the:
A. level of inflation is unaffected.
B. inflation rate goes from 3 percent to 14 percent.
C. inflation rate goes from 3 percent to 8 percent.
D. inflation rate goes from 8 percent to 14 percent.
Answer: B
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If the monetary base does not change and the desired reserve ratio increases, the money multiplier ________ and the quantity of money ________
A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; does not change E) decreases; increases
According to the law of demand, when the price of gas rises, Question 28 options:
A. people will drive more. B. oil refining companies record financial losses. C. car sales increase. D. people decrease the quantity of gas demanded, perhaps by driving less.
A macroeconomist would most likely study
A. the effect of increased union wages on the cost of producing automobiles. B. the effects of an increase in wage rates on a woman's decision to enter the labor force. C. the effects of a lower income tax rates on the nation's total production of goods and services. D. the effects of changing grape prices on the market for oranges.
Ajax has just discovered that the marginal revenue product generated by the last worker hired was $75 while the marginal factor cost was $95. What should Ajax do?
A) Leave the level of production unchanged. B) Increase the amount produced. C) Reduce the amount produced. D) Collect more information before making a decision.