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
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.
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.