Inflation means
A. Specific prices are rising, and relative prices are falling.
B. Both relative prices and average prices are rising.
C. Average prices are rising, but it is not certain what is happening to relative prices.
D. Relative prices are rising, but it is not certain what is happening to average prices.
Answer: C
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Refer to the figure above. If the engineer spends his entire time producing computer programs, how many computer programs can he produce?
A) 12 B) 30 C) 45 D) 50
Refer to Figure 15-15. Why won't regulators require that Erickson Power produce the economically efficient output level?
A) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit B) because Erickson Power will earn zero profit C) because there is insufficient demand at that output level D) because Erickson Power will sustain persistent losses and will not continue in business in the long run
An international lender of last resort creates a serious moral hazard problem because ________ and other ________ of banking institutions expect that they will be protected if a crisis occurs
A) depositors; debtors B) depositors; creditors C) borrowers; debtors D) borrowers; creditors
If the Fed pursues a strategy of targeting an interest rate when fluctuations in money demand are prevalent
A) fluctuations of nonborrowed reserves will be small. B) fluctuations of nonborrowed reserves will be large. C) the Fed will probably quickly abandon this policy, as it did in the 1960s. D) the Fed will probably quickly abandon this policy, as it did in the 1950s.