By the life-cycle hypothesis, a cyclical boom which causes inflation to accelerate and thus causes people to ________ the real value they estimate their wealth to represent, leads them to ________ the proportion of their current income devoted to
consumption, which turns out to be a ________ influence on the economy. A) lower, reduce, stabilizing
B) lower, increase, destabilizing
C) raise, increase, stabilizing
D) raise, reduce, stabilizing
E) raise, reduce, destabilizing
A
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With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as
A) y/x. B) x/y. C) (change in y)/ (change in x). D) (change in x)/ (change in y).
Capital expenditures:
a. are easily reversible b. are forms of operating expenditures c. Affect long-run future profitability d. Involve only money, not machinery e. none of the above
Which government agency compiles the consumer price index?
A. the Government Accounting Office B. the Bureau of Labor Statistics C. the Congressional Budget Office D. It is not compiled by a government agency, but rather by an independent research institution called the Conference Board.
Suppose 2010 is the base year. From 2010 to 2020, the price index increases from 100 to 102.5. If nominal Gross Domestic Product (GDP) is $2,800 in 2020, then the real Gross Domestic Product (GDP) in 2020 is
A. $2,870. B. $2,700. C. $2,800. D. $2,732.