The coordination task of any economy that answers the question of how output shall be divided among consumers may best be described as
A. output selection.
B. production planning.
C. distribution.
D. input-output analysis.
Answer: C
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If you have a mortgage on your house at 6 percent and the inflation rate when the mortgage was acquired was 3 percent but has since increased and is now 8 percent per year; the current real interest rate is
A) -2 percent per year. B) 8 percent per year. C) 6 percent per year. D) 0 percent per year. E) 14 percent per year.
Refer to the table at right. The balance of trade is
Consider two alternative worlds: (i) the world works according the real business cycle model, and the central bank acts to stabilize the price level; (ii) the world works according to the New Keynesian sticky price model, and the central bank acts to
make the output gap zero. Which is correct? A) We would prefer to live in world (ii). B) We would prefer to live in world (i). C) The data cannot tell us whether we are living in world (i) or world (ii). D) in either world, the central bank is irrelevant.
To tell a compelling story, an economist relies on
a. case studies b. anecdotes c. irrelevant data d. anecdotes and irrelevant data e. case studies and anecdotes