The reason that changes in spending don't immediately flow into changes in inflation is that:
A. the velocity of money changes only slowly.
B. real GDP is relatively stable.
C. prices and wages are sticky.
D. inflation depends on the money supply.
Ans: C. prices and wages are sticky.
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The U.S. Gini ratio for income has ________ within recent decades, which means economic inequality has ________
A) decreased; increased B) decreased; decreased C) increased; decreased D) increased; increased
If Chinese consumers want to buy US goods, they will
a. buy Yuans to sell US Dollars b. Sell Yuans to buy US Dollars c. Demand Yuan d. Both b and c
Economies of scale yield
a. declining average cost as output increases b. declining marginal cost as output increases c. declining total cost as output increases d. diminishing average returns as output increases e. increasing marginal revenue as output increases
If we allow interpersonal comparisons of utility, and the law of diminishing marginal utility holds, then what can we reasonably suppose about the marginal utility of Bill Gates' millionth dollar?
a. It is less than the marginal utility of your hundredth dollar. b. It is more than the marginal utility of your hundredth dollar. c. It is equal to the marginal utility of your hundredth dollar. d. It is equal to zero. e. It yields higher satisfaction than your hundredth dollar.