The Fed prefers to focus on inflation based on which price index?
A) personal consumption expenditures price index
B) consumer price index
C) GDP deflator
D) producer price index
A
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When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect
A) substitute; complement B) substitution; income C) normal; inferior D) supply; demand
The adoption of capital controls makes
A) everyone in the domestic economy better off. B) some domestic residents better off and some worse off, although on average welfare increases. C) some domestic residents better off and some worse off, although on average welfare decreases. D) everyone in the domestic economy worse off.
Figure 11-1
The Red Cross is virtually the only operator of blood banks in the United States. In Figure 11-1 are the demand and cost curves facing the Red Cross blood bank. If the Red Cross were to set price and quantity at the level that it would obtain in the long run in a competitive industry, how much blood would it sell?
A. OA B. OB C. OD D. OC
If the money multiplier is 5, what is the reserve ratio?
A. 0.80 B. 0.10 C. 0.25 D. 0.20