To compare the real price of gas in 1975 to the real price in 2013, we need to know
A) the two prices in both years and the inflation rate in 2013.
B) just the two nominal prices in both years.
C) the two prices in both years and the two interest rates in both years.
D) the two prices in both years and the CPI in both years.
E) the two prices in both years and the two inflation rates in both years.
D
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It has been said that “economics is the science of common sense.” Is economics synonymous with common sense?
What will be an ideal response?
The desire to smooth consumption is reflected in
A) the consumer's budget constraint. B) the curvature in a consumer's indifference curves. C) choice between present and future. D) the production possibilities frontier.
Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents: a. a smaller quantity of consumer goods than that represented by a point inside the PPF. b. an inefficient output combination of the two goods
in the economy. c. an unattainable output combination of the two goods in the economy. d. an output combination of more consumer goods than capital goods. e. a smaller quantity of capital goods than that represented by a point inside the PPF.
The change in the quantity of goods and services demanded in the U.S. is based on the logic that as the price level rises,
a. real wealth falls, interest rates rise, and net exports fall. b. real wealth falls, interest rates rise, and net exports rise. c. real wealth rises, interest rates fall, and net exports fall. d. real wealth rises, interest rates fall, and net exports rise.