If your money income stays the same but the price of one good that you are buying goes up, your effective purchasing power
A) rises.
B) does not change.
C) cannot be determined.
D) falls.
Answer: D
You might also like to view...
If the economy has substantial unemployment, then the inflationary costs of expansionary policy are likely to be: a. low, and the unemployment gains minimal. b. low, and the unemployment gains large
c. high, and the unemployment gains minimal. d. high, and the unemployment gains large.
Just after the terrorist attack on September 11, 2001, the Fed stood ready to lend financial institutions funds. When the Fed did this, it was acting in its role of lender of last resort
a. True b. False Indicate whether the statement is true or false
The cross-price elasticity of demand between two goods that are substitutes can never be:
A. negative. B. less than one. C. positive. D. greater than one.
Inflation is undesirable because it:
A. distorts the information value of prices. B. always makes the nation poorer. C. redistributes income from those who can raise prices to those who cannot. D. makes everyone worse off.