The nation, as a whole, is hurt by inflation if it:
a. Is unexpected.
b. Is expected.
c. Reduces productivity.
d. Rises at a rate that is greater than real GDP.
e. All the above are true.
.C
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The rational expectations hypothesis indicates that people
a. pay little attention to policy when forming their expectations about the future. b. expect the next period to be pretty much like the recent past, regardless of policy changes. c. will always be able to forecast the future accurately. d. change their expectations about the future if policy changes.
Milk can be used to make yogurt and cheese, other things equal, if consumption starts demanding more yogurt
a. Supply of milk will decrease. b. Demand of milk will increase. c. Answer was NONE are
When the CPI increases from one year to the next:
A. the cost of living has decreased. B. people need to spend more money to buy the same amount of goods as the previous year. C. deflation has occurred. D. All of these statements are true.
When disposable income is extremely low,
A. autonomous consumption is greater than induced consumption. B. induced consumption is greater than autonomous consumption. C. autonomous consumption is equal to induced consumption. D. autonomous consumption is rising.