Answer the following statements true (T) or false (F)
1) During the past ten years, the annual rate of inflation in the United States has averaged less
than 1 percent.
2) If the price level doubled in a 23-year period, we can conclude that the average annual rate of
inflation over that period was about 3 percent.
3) Unanticipated inflation benefits debtors at the expense of creditors.
4) Unanticipated inflation helps some groups in the economy.
5) If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the inflation
premium is 13 percent.
1) F
2) T
3) T
4) T
5) F
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What did the U.S. business cycles in the early 1890s and early 1930s have in common?
A) rapid industrialization B) persistently high inflation C) high consumer confidence D) all of the above E) none of the above
A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70 . What would you advise this firm to do?
a. Shut down. b. Increase output. c. Stay at its current output. d. Decrease output. e. Decrease price.
Which of the following scenarios would be most likely to cause the shift in the supply for loanable funds from S0 to S1, shown in the following diagram?
a) Households decide to save more. b) Households decide to save less. c) Businesses decide to invest more. d) Businesses decide to invest less.
Inflation distorts the operation of our tax and financial system.
Answer the following statement true (T) or false (F)