In Zimbabwe, inflation rose from an annual rate of 32 percent in 1998 to 100,000 percent in early 2009. Considering only the effects of this unexpected inflation, which of the following groups are helped by the inflation:
A. No one; inflation hurts everyone
B. People living on fixed pensions
C. Debtors
D. Unemployed people
Answer: C
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What happens to the aggregate demand curve in the United States if the exchange rate increases so that U.S.-made products become more expensive?
What will be an ideal response?
The following graph shows the supply of movie downloads. If price changes from $0.50 to $2.00, what will be the change in the market quantity supplied?
A. 7 movie per week B. 1 movie per week C. 8 movie per week D. 6 movie per week
Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s).Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in supply, the equilibrium quantity of drugs:
A. will increase. B. will decrease. C. will not change. D. may or may not change.
Scott and Tom have dinner together at a new restaurant, and they discover that the portions are huge but taking home leftovers is not allowed. When both decide they are full, Scott forces himself to finish the rest of the food on his plate even though he doesn't really want to, while Tom asks the waiter to remove his plate while it still contains some food. How would an economist describe this behavior?
A. Scott acted rationally, because the food otherwise would have been thrown away. B. Tom acted rationally, maximizing his utility. C. Both Tom and Scott acted rationally. D. Both Tom and Scott acted irrationally.