If there are only two goods in the economy, one whose price rises by 8 percent and one by 10 percent, it is possible that inflation is:
A. 2 percent.
B. 9 percent.
C. 10 percent.
D. 8 percent.
Answer: B
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Joe's income is $500, the price of food (F, y-axis) is $2, and the price of shelter (S, x-axis) is $100. Which of the following bundles is in Joe's opportunity set?
A) 50 units of food, 5 units of shelter B) 200 units of food, 2 units of shelter C) 100 units of food, 1 unit of shelter D) 150 units of food, 3 units of shelter
All of the following are examples of negative externalities except
a. getting the flu vaccine. b. smoking in a crowded bar. c. driving while intoxicated. d. littering in the park. e. pouring paint down the storm drains.
According to classical macroeconomic theory, changes in the money supply affect
a. real GDP and the price level. b. real GDP but not the price level. c. the price level, but not real GDP. d. neither the price level nor real GDP.
People tend to spend more money the ______ the amount of credit available and the ____ the stock of liquid assets in the hands of consumers.
A. higher; higher B. lower; lower C. higher; lower D. lower; higher