In an economy, the price level has doubled in about 70 years. The approximate annual percentage rate of increase in the price level over this period has been:
A. 1 percent.
B. 2 percent.
C. 3 percent.
D. 4 percent.
Answer: A
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Which of the following describes the behavior of M1 in recent decades?
A) it soared during the recessions of 1990-91, 2001, and 2007-2009 B) it tended to grow more rapidly than M2 C) it was more stable than M2 D) it has not declined since the 1970s
Which of the following is most important if a country is going to grow rapidly and achieve a high level of per capita income?
a. an abundance of natural resources b. a warm moist climate c. a small population relative to the geographic size of the country d. institutions and policies that encourage people to engage in productive activities
A student buys only two goods pizza and books. The price of pizza is $5 and the price of books is $10. At the student's present level of consumption, her marginal utility of pizza is 4 and her marginal utility of books is 2. Currently, the student is spending all her income.A. Is this student currently in consumer equilibrium (maximizing utility)? Explain using a graph.B. What would this student have to do in order to increase her utility? Use the diagram from part (a) to explain your answer.
What will be an ideal response?
For fiscal policymakers, one of the results of an independent central bank is:
A. fiscal policymakers cannot borrow unless the Federal Reserve prints more money. B. fiscal policymakers always have to borrow to increase spending. C. increased government spending has to be financed with either higher taxes or increased government borrowing. D. to finance government spending the Treasury has to order more currency from the central bank.