To ensure that your salary maintains its real purchasing power from year to year, your nominal salary must be:
A. aggregated.
B. hyperinflated.
C. deflated.
D. indexed.
Answer: D
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Refer to the table above. France has absolute advantage in
A) grapes. B) textiles. C) both grapes and textiles. D) neither grapes nor textiles.
The recognition lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
Government debt increases the interest rate and private investment
Indicate whether the statement is true or false
Price indexes like the CPI are calculated using a base year. The term base year refers to:
a. the first year that price data are available. b. any year in which inflation was higher than 5 percent. c. the most recent year in which the business cycle hit the trough. d. an arbitrarily chosen reference year.