The clearest sign of inflation would be a(n)
A. increase in the price level.
B. increase in the quantity of total final output.
C. decrease in the quantity of total final output.
D. simultaneous increase in both output and prices.
Answer: A
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Refer to Figure 10-3. Best friends Laurel and Hardy, both enjoy watching romantic comedies and science fiction movies. Based on the diagrams above what can you conclude about their movie preferences?
A) They have identical movie preferences. B) The diagrams do not provide any information about relative preferences. C) Laurel enjoys science fiction movies more than Hardy. D) Laurel enjoys romantic comedies more than Hardy.
Acme Computer Co sells computers to retail stores for $400 . If Acme requires the retailers to charge customers $500 for the computers, then it is engaging in
a. resale price maintenance. b. predatory pricing. c. tying. d. monopolistic competition.
According to the textbook, the evidence indicates that NAFTA has:
A. stopped illegal immigration from Mexico. B. reduced the wages of skilled workers in the United States. C. not significantly reduced the employment of unskilled workers in the United States. D. reduced the employment of unskilled workers in the United States significantly.
Assuming sticky prices and given expectations of future exchange rates, what is the short-run effect on the exchange rate of the U.S. dollar (purchasing euros) and on domestic and foreign rates of return if there is a temporary increase in the quantity of euros?
a. Rates of return on domestic and foreign assets diverge, as the dollar appreciates. b. Domestic and foreign rates of return both fall, as the dollar depreciates. c. Domestic and foreign rates of return converge, as depreciation of the euro raises r turns for U.S. investors who purchase euro-based assets. d. Rates of return on dollar assets fall, causing investors to switch into euro assets and, therefore, the U.S. dollar depreciates against the euro