Price controls
A) do not include black markets.
B) are another name for the price system.
C) do not include rent controls.
D) interfere with the rationing function of prices.
Answer: D
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If money is declared to be legal tender, it must be
A) minted from a precious metal. B) acceptable to citizens of foreign countries. C) possible to exchange it for an equivalent amount of precious metal. D) accepted to settle private transactions and it must be used in paying taxes.
The Keynesian model differs from the classical model in that
a. people do not have perfect information about the future in the Keynesian model. b. real wages are not flexible in the Keynesian model. c. monetary policy affects aggregate demand in the Keynesian model. d. expectations are crucial in the classical model. e. all of the above.
In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007 . A hamburger cost $5 in 2006 and $6 in 2007 . Which of the following statements is correct?
a. When 2006 is chosen as the base year, the consumer price index is 90 in 2007. b. When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. c. When 2007 is chosen as the base year, the consumer price index is 100 in 2006. d. When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007.
The Consumer Price Index is calculated by the
What will be an ideal response?