Inflation can be defined as
A. a decrease in the purchasing power of money.
B. no change in the purchasing power of money.
C. an increase in real income.
D. an increase in the purchasing power of money.
Answer: A
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All else held equal, economists would prefer a tariff over an import quota because
A. domestic producers can charge higher prices with a tariff than with an import quota. B. compared with an import quota, a tariff enables consumers to pay lower prices. C. a tariff enables the government to collect revenue, whereas an import quota does not. D. a tariff allows the market to adjust import quantities if domestic supply, domestic demand, or world price changes.
Excessive government spending can cause demand-pull inflation
a. True b. False Indicate whether the statement is true or false
The number of Compact Discs purchased by a consumer depends on the price of the discs as well as the prices of all other goods purchased
a. True b. False Indicate whether the statement is true or false
Addictive substances such as tobacco have long-run demand that is more ______ than short-run demand. In other words, the consumption of addictive substances ______ price sensitive and raising prices ______ reduce consumption over time.
a. price elastic; is; will b. price inelastic; is; will c. price inelastic; is not; will not d. price elastic; is not; will not