As an economist working for a U.S. government agency you determine that a particular country has a sacrifice ratio of 3 . Policy-makers in that country are thinking of lowering the inflation rate from 10% to 4%. Is this sacrifice ratio higher or lower than the typical estimate? From your numbers, what is the amount of output that will be lost for this country to reduce its inflation rate?
a. The sacrifice ratio is higher than the typical estimate. It will cost 30% of annual output to reach the new inflation target.
b. The sacrifice ratio is higher than the typical estimate. It will cost 18% of annual output to reach the new inflation target.
c. The sacrifice ratio is lower than the typical estimate. It will cost 30% of annual output to reach the new inflation target.
d. The sacrifice ratio is lower than the typical estimate. It will cost 18% of annual output to reach the new inflation target.
d
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The private sector balance equals
A) saving minus investment. B) net taxes minus government expenditures. C) investment minus saving. D) net taxes plus government expenditures. E) saving plus investment.
With increases in inflation demand for money that does not earn a return decreases. Carrying less cash in our pockets means higher ________
A) shoe-leather costs B) menu costs C) capital gain tax bills D) all of the above E) none of the above
Which of the following statements about a supply curve is FALSE?
A) It shows a direct (positive) relationship between price and quantity supplied. B) It shows the quantity supplied at each specific price. C) It typically slopes downward to the right. D) It has a positive slope.
If the aggregate supply curve is vertical, then shifts in aggregate demand will not change aggregate output
a. True b. False Indicate whether the statement is true or false