Which of the following is defined as a rate of downward movement in the price level for an aggregate of goods and services?
A. Price index
B. Reinflation
C. Deflation
D. Inflation
C. Deflation
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The Federal Reserve's narrowest definition of the money supply is
a. M0. b. M1. c. M2. d. M3.
The free-rider problem arises
A. when people feel their contribution is so small relative to the total amount needed that it won't make a difference whether they contribute or not. B. when people realize they will still receive the benefits of a good whether they pay for it or not. C. whenever there is a surplus of the product in the market. D. whenever the government produces a good or service.
An increase in real GDP affects the demand for money because
A) tax payments rise because more income is earned. B) there is an inverse relationship between the quantity money demanded and nominal GDP. C) at the higher price level, it takes more dollars to make expenditures. D) when real GDP increases, more money is needed to make expenditures. E) the larger real GDP, the higher the real interest rate.
Compared to the free-market outcome, if the production of wheat were subsidized by the government,
A) the supply of wheat would increase. B) the quantity supplied of wheat would increase. C) the quantity demanded of wheat would increase. D) all of the above would occur. E) none of the above would occur.