The rate at which one good can be converted technologically into another is called
A) the marginal rate of transformation.
B) the marginal rate of substitution.
C) the marginal product of labor.
D) the rate of conversion.
A
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If the growth rates of nominal GDP and real GDP in an economy are 6% and 2% respectively, the inflation rate in the economy must be:
A) 2%. B) 8%. C) 4%. D) 3%.
When a labor supply curve is backward-bending, the elasticity of labor supply in the backward-bending portion is
A. Negative. B. Greater than 1. C. Zero. D. Positive but less than 1.
If the annual inflation rate in an economy is "i", then $1 borrowed at the beginning of a year will have the same purchasing power as ________ dollars at the end of the year
A) (1 - i) B) (1/i) C) (1 + i) D) i
Why do policymakers have the goal of stable prices?
a. Stables prices always keep the economy in expansion b. Firms make too much money when prices are rising c. Inflation is always associated with wars d. Inflation imposes costs on society e. Inflation is always associated with trade deficits