If an individual prefers X to Y and prefers Y to Z then the consumer must also prefer X to Z. This property is called:
A. transitivity.
B. completeness.
C. the ranking principle.
D. the choice principle.
A. transitivity.
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Using Figure 3 below the distance between what 2 lines illustrate an inflationary output gap?
A. PAE2 to PAE3
B. PAE1 to PAE2
C. Y1 to Y2
D. Y2 to Y3
If both the lender and borrower agree on an 8 percent interest rate, both expect a 4 percent inflation rate, and inflation turns out to be 4 percent, then ________ by the inflation.
A. the borrower gains and the lender is hurt B. both the borrower and lender are hurt C. neither the borrower nor the lender are hurt D. the borrower is hurt and the lender gains
The inflation associated with the oil price shocks in the 1970s after OPEC restricted the supply of oil is an example of
A. cost-push inflation due to a demand shock. B. cost-push inflation due to a supply shock. C. demand-pull inflation due to a supply shock. D. demand-pull inflation due to a demand shock.
One of moneys primary roles in the economy comes from the use of money to transfer purchasing power to the future. This role of money is called
A. unit of account. B. standard of deferred payment. C. store of value. D. medium of exchange.