If the economy is at full employment and the Fed increases the quantity of money, _______
A. aggregate demand increases, a recessionary gap appears, and the money wage rate starts to rise
B. aggregate supply increases, the price level starts to fall, and an ex-pansion begins
C. aggregate demand increases, an inflationary gap appears, and the money wage rate starts to rise
D. potential GDP and aggregate supply increase together and the price level does not change
C An increase in the quantity of money can set off a demand-pull inflation by increasing aggregate demand, thereby creating an inflationary gap.
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Suppose that the CPI in Egypt was 111 in 2015 and 122 in 2016. The inflation rate between those two years was approximately
A) 4.8 percent. B) 5.5 percent. C) 9.9 percent. D) 11 percent.
Damage from floods and hurricanes which destroy a large portion of this year's crop of oranges will definitely make oranges more price inelastic in supply
Indicate whether the statement is true or false
Firms engage in tacit collusion when:
A. they predict what the other will do and attempt to undercut them. B. they collude without communicating, sustaining a price above the noncooperative price that would arise in a single competitive interaction. C. they communicate to reach an agreement about the prices they will charge. D. they communicate what type of good they will produce.
The marginal rate of substitution is
A. the slope of the utility curve. B. the slope of the contract curve. C. the slope of the utility possibilities curve. D. none of these answer options are correct.