Which of the following would be most likely to increase consumption spending?
a. A higher interest rate
b. A drop in stock prices
c. A reduction in consumer credit card debt
d. The expectation of lower future prices
e. An increase in the income tax rate
C
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According to the textbook, income inequality statistics can be misleading because
A) they are collected by the Census Bureau, whose objectivity cannot be trusted. B) they ignore the income mobility of individual families and households through time. C) they do not take into account inflation. D) they fail to be of use in policy proposals and debates.
Which of the following pairs of values of the consumer price index (CPI) is consistent with an inflation rate of 10 percent for 2014?
a. CPI in 2014 = 90; CPI in 2015 = 100 b. CPI in 2014 = 102; CPI in 2015 = 112 c. CPI in 2013 = 210; CPI in 2014 = 220 d. CPI in 2013 = 210; CPI in 2014 = 231
People respond to incentives
A) by ignoring negative incentives and responding to positive incentives only. B) only when they are irrational. C) as they never intentionally make decisions that would leave them worse off. D) when they have low incomes.
An open market sale of securities will tend to cause
A) a reduction in the supply of central bank money. B) a reduction in the demand for currency. C) a reduction in the demand for reserves. D) none of the above