Changes in relative prices during inflationary periods usually lead to
A. decreases in real income.
B. some people gaining real income.
C. increases in the purchasing power of money.
D. increases in real income.
Answer: B
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Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (4) might represent
A. the purchase of stealth bombers. B. personal income taxes. C. investment spending by private corporations. D. the services of NASA astrophysicists.
Which price index published by the US federal government represents wholesale price changes?
A) Consumer Price Index B) Producer Price Index C) GDP deflator D) Dow-Jones Industrial Average
The fundamental source of monopoly power is
a. barriers to entry. b. profit. c. decreasing average total cost. d. a product without close substitutes.
When someone does not have to pay for a good it:
A. means there is zero demand for the good. B. is rational to overconsume. C. is rational to underconsume. D. is irrational to overconsume.