The rate of inflation in the United States since 1960 has:
A. declined steadily and predictably from 14% to 1.3%.
B. remained below 1.3% as a result of effective Federal Reserve monetary policy.
C. increased steadily from 1.3% to 14% and then decreased steadily back to 1.3%.
D. fluctuated between 1.3 and 14%, often catching many people by surprise.
Ans: D. fluctuated between 1.3 and 14%, often catching many people by surprise.
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If the market price of a perfectly competitive firm's product is below its average variable cost, then the firm's
A) marginal revenue is zero. B) total revenue is as large as possible. C) total revenue if it stayed open would be less than its total variable costs. D) total revenue if it stayed open is less than its total cost but greater than its total fixed costs.
The figure above shows the market for coffee If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the deadweight loss is
A) zero. B) $7.5 million. C) $15 million. D) $10 million.
Explain why some economists claim that the persistence of high unemployment rates during the recovery from the recession of 2007–2009 is evidence of "hysteresis."
What will be an ideal response?
A feature of perfect competition is
A) use of non-price competition by firms. B) mutual interdependence among firms. C) unique products. D) standardized products.