In the United States, most periods of very high inflation occurred
A) during times of war.
B) during recessions.
C) in the past 25 years.
D) before the year 1800.
A
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The Federal Reserve Bank attempted to deal with the sluggish aggregate demand that followed the housing market crash and subsequent financial crisis through:
A. contractionary monetary policy. B. expansionary fiscal policy. C. expansionary monetary policy. D. contractionary fiscal policy.
Suppose a local union has a contract that calls for the nominal wage to increase by 5 percent plus 100 percent of any increase in the CPI. If the CPI increases by 4% and there is a 1% positive bias in the inflation rate, by how much would nominal wages unnecessarily increase?
a. 9 percent b. 1 percent c. 5 percent d. 3 percent e. 4 percent
Bill and Bev are playing the ultimatum game, starting with $50 . A coin flip results in Bev being the one to propose a division of the $50 . If Bev acts as economic theory assumes, she should propose that
a. she gets $30 and Bill gets $20. b. she gets $25 and Bill gets $25. c. she gets $24 and Bill gets $26. d. she gets $49 and Bill gets $1.
Answer the following statement true (T) or false (F)
1) The size and scope of government inhibit the flow of information to decision makers, leading to inefficient outcomes. 2) The pursuit through government of a transfer of wealth at society's expense is called "rent seeking." 3) The principal-agent problem is a problem for the private sector but does not apply to political decision making. 4) Medicare is the U.S. government's largest unfunded liability. 5) A debt crisis refers to how much government spending exceeds tax revenues in a given year.