When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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The percent increase in the CPI from one year to the next is a measure of the
A) real interest rate. B) inflation rate. C) GDP deflator. D) unemployment rate.
There are 100 residents in the City of Mos Eisley. Each resident's willingness to pay for an additional acre of parkland (P) depends on the number of acres the City already has (Q), and is given by P = 20 - 0.10Q. If parkland is a public good, and the cost of each acre of parkland is constant and equal to $500, then what's the socially optimal number of acres of parkland in Mos Eisley?
A. 0 acres B. 185 acres C. 150 acres D. 520 acres
Which of the following is the behavior of a rational consumer?
a. to seek to maximize his or her own total utility b. to purchase a good until marginal utility falls to zero c. to match his or her personal utility to that of all other consumers d. to maximize the variety of goods he or she purchases
If the rent controlled rent is above the equilibrium, the result will be
A. a surplus of rental apartments. B. that landlords will charge more than the equilibrium rent. C. nothing different than if there were no rent control. D. a shortage of rental apartments.