What has been TRUE about inflation in the United States since 1960?
A. Inflation rates have been consistently positive.
B. Inflation rates have been consistently above 100 percent per year
C. The annual rate of inflation has varies around zero percent.
D. The nation has experienced persistent deflation.
Answer: A. Inflation rates have been consistently positive.
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An increase in domestic output would cause a ________ in net exports and a ________ in the exchange rate
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
One major characteristic of the price system is that
A) consumers together are the ones who ultimately decide what is produced. B) individual sellers ultimately decide what is produced in the market. C) competition among sellers is reduced. D) all exchanges are regulated by the government.
How does the imposition of a tariff reduce the price of imports?
a. At the lower quantity supplied, the price to the importer is lower than if there were free trade. b. At the lower quantity demanded, the price to the importer is lower than if there were free trade. c. Supply of the product is increased from domestic production, reducing the price of the imports. d. Demand for the product is decreased, so that price must fall.
Fiscal policy is concerned with:
a. encouraging businesses to invest. b. regulation of net exports. c. changes in government spending and/or tax revenues. d. expanding and contracting the money supply.