Two countries are experiencing 10% money growth a year. However, country A is growing at 2% and country B is growing at 5%. Which country will have the higher inflation rate?

What will be an ideal response?


According to the quantity theory, countries with a higher level of output will have a lower price level holding the money supply and velocity constant. As a result, the faster growing country will experience lower inflation.

Economics

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Suppose France's real GDP grew from $750 billion in 2010 to $821 billion in 2011. What was the growth rate of France's real GDP?

A) 10 percent B) 9.5 percent C) 9.1 percent D) 8.6 percent E) $71 billion

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Consider a firm that has just built a plant, which cost $1,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below

Number of Worker Hours Output Marginal Product Fixed Cost Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost 0 0 -- -- -- 50 400 100 900 150 1300 200 1600 250 1800 300 1900 350 1950

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If workers received a 5 percent wage increase and the rate of inflation was 10 percent, then their real wage:

A. decreased. B. remained constant. C. increased. D. equaled the nominal wage.

Economics

If quantity demanded is greater than quantity supplied

A. the price will fall. B. the price will rise. C. the market is cleared. D. the price is at equilibrium.

Economics