Which of the following statements is true?
a. Base year prices are necessarily higher than current year prices.
b. The CPI in the base year is always 100.
c. If the CPI is 112 in year 1 and 123 in year 2, prices have risen by approximately 9.8 percent between the two years.
d. b and c
e. a, b, and c
Answer: d. b and c
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A black market develops only when quantity demanded exceeds quantity supplied.
Answer the following statement true (T) or false (F)
In describing the economic setting in the real goods market, which of the following economic measures is the most helpful?
a. Current real exchange rate b. Current unemployment rate and labor force participation rate c. Annual inflation rate during the past year d. Current nominal exchange rate e. Percentage change in nominal GDP during the past year
The price of one nation's currency in terms of the currency of another nation is called the
A. exchange rate. B. discount rate. C. IMF rate. D. fed funds ratio.
Depreciation of the Japanese yen would lead to
A. outward shift in the aggregate supply curve for Japan. B. upward shift in the aggregate demand curve for Japan. C. downward shift in the aggregate supply curve for Japan. D. inward shift in the aggregate demand curve for Japan.