Suppose the inflation rate of a country falls from 8 percent during 2002-2004 to 6 percent in 2005-2007, under the adaptive expectations hypothesis what will the expected rate of inflation at the beginning of 2008?
a. 2 percent
b. 4 percent
c. 6 percent
d. 8 percent
C
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We think about the cost of supplying labor as the:
A. the additional equipment and training that is required when hiring a person. B. input costs that go into producing a unit of labor. C. opportunity cost of the individual's time. D. average wage in the labor market.
If a 10 percent decrease in the price of one good generates a 3 percent increase in the quantity demanded for another good, then the
a. two goods are complementary b. cross elasticity between the two goods is positive c. two goods are substitutes d. price elasticity of demand for the good whose quantity demanded increased must be inelastic e. price elasticity of demand for the good whose quantity demanded increased must be elastic
The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____
A. direct; inverse B. inverse; direct C. inverse; inverse D. direct; direct
Developing countries are damaged by dead capital because
A. it reduces too much household saving. B. it results in inefficiencies that greatly reduce the rate of return on capital investment. C. it replaces too many workers, creating unemployment. D. it must be sold as scrap.