The expected inflation rate is the inflation rate that people forecast and use to help set
A) the money wage rate.
B) the real wage rate.
C) real GDP.
D) the natural rate of unemployment.
E) the price level.
A
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Which of the following is true?
A) The gap between the income per capita of U.S and the income per capita of poorer countries is small when exchange rate-based measures are used. B) The gap between the income per capita of U.S and the income per capita of poorer countries is large when PPP-based measures are used. C) Exchange rate-based measures of income per capita are identical to PPP-based measures. D) Exchange rate-based measures of income per capita differ from PPP-based measures of income per capita.
Demand and marginal revenue curves are downward-sloping for monopolistically competitive firms because
A. product differentiation allows each firm some degree of monopoly power. B. there are a few large firms in the industry and they each act as a monopolist. C. mutual interdependence among all firms in the industry leads to collusion. D. each firm must take the market price as given.
If we let P = the domestic price of a basket of goods and Pf the foreign price of the same basket of goods measured in domestic currency:
A. You cannot determine the relative prices of foreign goods from the equation P/Pf . B. If P/Pf > 1 foreign products will seem inexpensive. C. If P/Pf >1 foreign products will seem expensive. D. If P/Pf = 1 the nominal exchange rate is also = 1.
When the productivity of a resource declines, its ________ and its _________ also declines.
Fill in the blank(s) with the appropriate word(s).