Unanticipated inflation tends to penalize:
A. people who save money in financial institutions.
B. businesses that borrow money from financial institutions.
C. individuals who borrow money from financial institutions.
D. governments that have a progressive personal income tax.
Answer: A
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An improvement in technology will cause the
A. economy to move down the production possibility frontier. B. production possibility frontier to shift inward. C. production possibility frontier to shift outward. D. economy to move closer to its production possibility frontier.
Recently, two construction industry unions also left the AFL-CIO and joined with ironworkers and bricklayers unions to form
A) the National Brotherhood of Teamsters. B) the National Construction Alliance. C) the American Federation of Workers. D) Change to Win.
The value added method of calculating GDP means
A. adding up the incomes of all businesses in a given year. B. adding up the difference between the sale price and the value of intermediate goods of each product at every stage of production. C. adding up the market values of all intermediate goods. D. calculating the percentage changes in the GDP between two years.
Answer the following questions true (T) or false (F)
1. When the Federal Reserve increases the money supply, people spend more because they now have more money. 2. The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year. 3. Expansionary monetary policy enacted during a recession will cause the inflation rate to increase.