If the price level last year was 180 and this year it is 176, then
a. there was inflation of 2.3 percent.
b. there was inflation of 4.0 percent.
c. there was deflation of 2.2 percent.
d. there was deflation of 4.0 percent.
c
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Three individuals consume a public good, and their demands are expressed as:
P1 = 1.5 - 0.005Q (for Q < 300 ); P2 = 4.5 - 0.007Q (for Q < 643 ); P3 = 3.0 - 0.002Q (for Q < 1500 ), where P represents price in dollars per unit and Q represents output in units per day. The marginal cost of providing the service is given as a constant $5.00 per unit. Determine the efficient level of output of this public good.
The slope of the short-run Phillips curve is consistent with:
a. the long-run trade-off between the unemployment rate and inflation. b. the long-run trade-off between inflation and GDP. c. the short-run trade-off between the money supply and interest rates. d. the short-run trade-off between business productivity and wage contracts. e. the short-run trade-off between the unemployment rate and inflation.
If demand is price inelastic, a decrease in price
a. raises total revenue to the seller b. raises total expenditure on the good, but not total revenue to the seller c. reduces total revenue to the seller d. leaves total revenue to the seller unchanged e. leaves total expenditure on the good unchanged
Which of the following is true of taxes?
A) Taxes drive a wedge between what buyers pay and what sellers receive. B) Business taxes generate government revenue without imposing a burden on consumers and households. C) Increases in taxes are the primary cause of inflation. D) Taxes increase the volume of mutually advantageous exchanges.