Ahmed bought the same goods and services this year as last year. But, he has experienced inflation. This means ________.
A. he has more income to spend on goods and services
B. the prices of goods and services has increased in general
C. the prices of all his goods and services has increased
D. he can afford to buy more of everything
Answer: B
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Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. In a crisis, the government changes the exchange rate to $0.50 per Islandia. This is an example of a(n):
A. devaluation B. revaluation C. depreciation D. appreciation
Suppose real GDP was 100 in year 1 and 105 in year 2. The growth rate of real GDP is
A) 0.5 percent. B) 1.5 percent. C) 2.5 percent. D) 5 percent.
Competitive markets with no external costs or benefits and no government price ceilings, floors, taxes or subsidies ________ efficient. According to the "It's not fair if the rules aren't fair" idea of fairness, competitive markets ________ fair
A) are; are B) are; are not C) are not; are D) are not; are not
If resale price maintenance leads to a shift in the market supply that exceeds the shift in the market demand, the quantity of the good sold will ________ and the manufacturer's profit will ________.
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase