Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the economy is on SRPC2, then the expected inflation rate is
A. 4%.
B. 5%.
C. 6%.
D. none of the above.
Answer: C
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Figure 11-1
In Figure 11-1, to achieve equilibrium at potential GDP the government could
a.
increase taxes.
b.
decrease transfer payments.
c.
increase government purchases.
d.
None of the above is correct.
The Cost-Benefit Principle predicts that people will be less likely to smoke if the government:
A. increases taxes on cigarettes, effectively raising the price. B. increases taxes on smoking-cessation devices such as nicotine patches. C. invests more money in cancer research. D. subsidizes hospitals treating lung disease.
In order to maximize utility, a consumer should allocate money income so that
A) the marginal utility of the last unit of each product consumed is greater than the total utility of each product consumed. B) the total utility derived from each product consumed is the same. C) the marginal utility obtained from the last dollar spent on each product is the same. D) the elasticity of demand on all products purchased is the same.
Deflation is defined as a situation in which
A. the value of the dollar is rising relative to other currencies. B. the rate of inflation is below 2 percent. C. the Gross Domestic Product's growth rate is less for a given quarter than it was for the prior quarter. D. the average of all prices of goods and services in an economy is falling.