Suppose the real interest rate is 4% and the expected inflation rate is 3%. If the money supply increases by 10% and output, the real interest rate, and the expected inflation rate are unchanged, then the price level increases by
A) 3%.
B) 4%.
C) 7%.
D) 10%.
D
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Before digital photography, most film processing companies had a policy of printing every picture on a roll of film and allowing customers to request a refund for pictures that were not clearly developed
The companies did this knowing that most customers did not ask for refunds. This was an example of consumers A) being overly optimistic about their future behavior. B) not making themselves aware of the policy regarding refunds. C) failing to ignore sunk costs. D) not taking nonmonetary opportunity costs into account.
Johnny spends his day doing a variety of activities; he spends the morning exercising and doing yard work, reads in the afternoon, and hosts a dinner party in the evening. Economists would say his choice to do a variety of activities instead of spending all of his time on one activity illustrates the concept of:
A. tastes and preferences B. budget constraints C. diminishing marginal utility D. income effect
"People are at war with themselves. Part of them says that they want to quit smoking, but another part says they need a cigarette right now. Or part of them says they want to be healthy, and another part says they need to satisfy their cravings for fatty food and sweets." These statements are suggesting that:
A. people have difficulties with self-control. B. needs should be taken seriously, but wants may be frivolous. C. sometimes inalienable rights are more important than people's desires. D. fairness should be considered in evaluating outcomes.
Given the following information for November? 2010, calculate the amounts of M1 and M2 in November 2010. The amounts are in billions of dollars
Currency $915.0 Demand deposits 507.0 Money market mutual funds (retail only) 711.1 Other checkable deposits 405.2 Savings deposits, including money market deposit accounts 5,317.9 Small-denomination time deposits 943.3 Traveler?s checks 4.7