If you regularly spend $100 a month on gasoline and the price of gasoline doubles, your purchasing power has
A) increased.
B) remained constant.
C) became stable.
D) decreased.
Answer: D
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A firm's advertising can help rivals
A) if it focuses on a general problem that the product addresses. B) if it focuses on a secret ingredient that only this firm possesses. C) if rivals do not advertise. D) if rivals advertise.
Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country. B. creates cultural and social differences among groups in developing countries. C. produces excessive levels of domestic saving. D. redistributes income.
One reason that we might observe a rise in net capital outflow could be interest rates in the:
A. rest of the world are declining, relative to the U.S. B. U.S. and the world are all increasing. C. U.S. and the world are all declining. D. U.S. are declining, relative to the rest of the world.
A worker would be hurt least by inflation when the
A. worker is protected by a cost-of-living adjustment clause in an employment contract. B. worker anticipates inflation and increases savings at the bank. C. worker is protected by fixed annual increases in wages and benefits in an employment contract. D. government increases the level of social security retirement benefits to correct for the effects of expected inflation.