If the CPI is currently 202, what does this tell you about inflation between last year and this year?
A) Inflation in the economy between this year and last year was 2%.
B) There was deflation in the economy between this year and last year.
C) The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next.
D) Inflation in the economy between this year and last year was 102%.
C
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When quantities of two goods belong to the same indifference curve, which of the following is true?
a. The combinations of the two goods along the indifference curve yield the same total utility. b. Prices of the two goods are equal. c. Marginal utilities of both goods are equal. d. The total utility of all combinations above the curve equal zero.
The relative income hypothesis, stating that MPC remains constant as national income increases, was proposed by
a. Keynes b. Friedman c. Duesenberry d. Marshall e. Modigliani
The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 3 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 3,000 dollars per period B. decrease by 9,000 dollars per period C. increase by 3,000 dollars per period D. increase by 9,000 dollars per period
Speculation in exchange markets is often thought of as conducive to wild fluctuations in exchange rates. In practice it appears that speculators
A. have destabilized several currencies that were at sustainable equilibrium levels. B. have no effect in fixed rate systems. C. in fact tend to stabilize exchange rates rather than destabilize them. D. All of the above are correct.