If the quantity of money grows at 4 percent a year, velocity grows at 2 percent, and real GDP grows at 2 percent a year, then the inflation rate equals
A) 0 percent. B) 8 percent. C) 4 percent. D) 2 percent. E) 6 percent.
C
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Harry's employer offers a "Holiday Account," which means they will take $50 a month out of Harry's paycheck and deposit it into this account throughout the year. In December, they give Harry the money in the account to spend during the holidays. Setting up such accounts:
A. ignores the fungibility of money. B. is irrational. C. creates a false distinction of money for employees like Harry. D. All of these are true.
When regulating a firm, setting price equal to marginal cost does not necessarily require providing a subsidy if
a. it always requires providing a subsidy b. ATC is always falling c. MC is always falling d. variable costs are covered e. ATC is U-shaped
Refer to the information provided in Table 21.10 below to answer the question(s) that follow. Table 21.10
Refer to Table 21.10. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's GDP deflator in year 1 is
A. 98. B. 100. C. 112. D. 120.
Assuming there is no government or foreign sector, if the multiplier is 10, the MPC is
A. 0.9. B. 0.8. C. 0.5. D. 0.1.