The experience of Paul Volcker's fight against inflation during the late 1970s and early 1980s indicates that firms and workers may have
A) had adaptive expectations.
B) had rational expectations but didn't trust Fed announcements.
C) preferred high unemployment to high inflation.
D) Both A and B are correct answers.
D
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Use the following table to answer the next question.YearAltaZornAltaZorn?(Real GDP)(Real GDP)(Population)(Population)1$2,000$150,00020050022,100152,00020250532,200154,000210508Per capita GDP was about
A. $303 in year 3 in Zorn. B. $5 in year 2 in Alta. C. $105 in year 3 in Alta. D. $200 in year 1 in Zorn.
One timing problem in using fiscal policy to counter a recession is the "legislative lag" that occurs between the
A. time the need for the fiscal action is recognized and the time that the action is taken. B. time fiscal action is taken and the time that the action has its effect on the economy. C. start of the recession and the time it takes to recognize that the recession has started. D. start of a predicted recession and the actual start of the recession.
In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA
A) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. B) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. C) simply counts the total number of goods and services produced in the marketplace and then adds them up. D) simply counts the total number of goods produced in the market place and then adds them up.
If the Consumer Price Index was 170 in one year and 180 in the next year, then the rate of inflation from one year to the next was approximately:
A. 7.2 percent. B. 6.3 percent. C. 5.5 percent. D. 5.9 percent.