Two types of bias that tend to cause the CPI to overstate the "true" rate of inflation are the ________ bias and the ________ bias.
A. quality adjustment; price adjustment
B. price; quantity
C. aggregation; price
D. substitution; quality adjustment
Answer: D
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In the short run, an increase in the growth rate of the quantity of money ________ the nominal interest rate and in the long run it ________ the nominal interest rate
A) lowers; lowers B) raises; lowers C) lowers; raises D) raises; raises E) does not change; raises
Import standards on specific countries usually address issues affecting:
A. domestic consumers. B. domestic producers. C. foreign production practices. D. how goods and services flow from one nation to another.
Classical economists defended the economic concept of
A. market clearing. B. government intervention in the marketplace. C. prolonged recession and high rates of unemployment. D. Keynesian economists.
Refer to the payoff matrix. Suppose that Speedy Bike and Power Bike are the only two bicycle manufacturing firms serving the market. Both can choose large or small advertising budgets. If this is a repeated game, it is in the long-term best interests of both players to:
A. compete, attempting to maximize their own payoffs each time the game is played.
B. agree to cooperate, but then cheat on the agreement.
C. agree to cooperate and then follow through on the agreement.
D. match the advertising behavior of the other player each time the game is played.