The phenomenon known as ________ occurs when inflation causes people to pay an increasing percentage of their income in taxes even when their real incomes have not changed.
A. the Fisher effect
B. substitution bias
C. hyperinflation
D. bracket creep
Answer: D
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The exchange rate is the price at which the ________ of one country exchanges for the ________ of another country
A) currency; goods B) goods; goods C) currency; currency D) currency; financial instruments
When the Fed buys U.S. government securities from a bank, the Fed
A) loans the money needed to buy the securities to the bank. B) increases the bank's reserves at the Fed. C) obtains the money for the purchase from the U.S. Treasury. D) decreases the monetary base and raises the federal funds rate.
If the price of a good decreased, a. It would also increase the quantity exchanged if it was caused by an increase in demand
b. It would also decrease the quantity exchanged if it was caused by an increase in supply. c. We would not know how quantity would change if we didn't know whether it was due to a change in demand or a change in supply. d. All of the above would be true.
A country that wants to increase its exchange rate to a higher level than the market exchange rate dictates would most likely adopt:
A. contractionary monetary policy. B. contractionary fiscal policy. C. expansionary fiscal policy. D. expansionary monetary policy.