A low rate of inflation, whereby prices increase so slowly from week to week that we hardly notice the change, is referred to as
a. zero inflation
b. creeping inflation
c. nominal inflation
d. real inflation
e. episodic inflation
B
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An exchange rate that is set by official government policy is called a ________ exchange rate.
A. nominal B. fixed C. real D. flexible
Which of the following is likely to happen if the government imposes a tariff?
A) Domestic producers will be worse off. B) Domestic producers will face higher foreign competition. C) Domestic producers will face fewer foreign competitors. D) Domestic consumers will be better off.
The stimulus strategy behind tax cuts will only be effective if Ricardian equivalence:
A. holds, and people increase their spending. B. holds, and people save more. C. fails to hold, and people increase their spending. D. fails to hold, and people save more.
If the average cost of flying the next flight is zero and one passenger is on the plane and has paid $50, should the next flight be flown?
A) Yes. B) No. C) Can't tell from the data provided. D) The plane should wait for at least one more passenger.