In 2012, consumers in Dexter consumed only books and pens. The prices and quantities for 2012 and 2013 are listed in the table above. The reference base period for Dexter's CPI is 2012. What is the cost of the CPI basket in 2012?
A) $430
B) $335
C) $320
D) $540
C
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In the Keynesian model, a short-run increase in investment spending will shift the aggregate
A) supply curve to the left. B) supply curve to the right. C) demand curve to the left. D) demand curve to the right.
What establishes the value of fiat money?
a. Our collective trust and confidence that the central government, which decrees that money cannot be refused as payment for debt. b. Gold and silver owned by the large commercial banks. c. The central government authority's promise to redeem fiat money for gold or silver upon demand. d. None of the above.
If Argentina has a large amount of farmland and Great Britain has many factories,
a. the two nations have no reason to trade. b. Argentina will be willing to trade but Great Britain will not. c. Great Britain will be willing to trade but Argentina will not. d. the two nations will probably engage in mutually advantageous trade.
What happens when two countries apply tariffs against each other in an attempt to capture their terms-of-trade gain?
a. Both countries lose because the terms-of-trade gain for one country is canceled by the tariff in the other country. b. Both countries gain because the terms-of-trade gain for one country is canceled by the tariff in the other country. c. Neither country gains nor loses because the terms-of-trade gain for one country is canceled by the tariff in the other country. d. The country initially applying the tariff gains because it captures the terms-of-trade gain; the other country neither gains nor loses.