Suppose that the consumer price index of a country was 160 at year-end 2007 and 168 at the end of 2008 . What was the country's inflation rate during 2008?
a. 5 percent
b. 8 percent
c. 60 percent
d. 68 percent
A
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When the share of government spending in GDP increased in the United States during World War II
A) investment's share of GDP fell. B) investment's share of GDP increased. C) government spending was crowded out. D) consumption's share of GDP increased.
What is the main rationale economists provide for assigning government the responsibility of protecting people against foreign aggressors?
A) It would be too dangerous to allow citizens to keep and bear arms for the purpose of forming militias to defend their communities. B) Most people are patriotic only when the government is involved. C) "National defense" must by necessity be nationalized. D) People will not risk their lives unless government requires them to do so. E) Private providers could not exclude non-payers from the benefits.
Monetarists' preference for reduced-form models is based on their belief that
A) reverse causation is a problem. B) structural models may understate money's effect on economic activity. C) money supply changes are always endogenous. D) monetary policy affects only investment spending.
You're deciding whether to install an $800 moonroof and a $400 security system in your car. Suppose the marginal benefit from the moonroof is $700 and the marginal benefit from the security system is $600. The economic decision rule dictates that you should:
A. purchase both options because the combined cost of both is less than the combined benefit. B. not purchase either because the benefits of each do not exceed the costs. C. purchase only the security system because its marginal benefit exceeds its marginal cost. D. purchase only the moonroof because that will provide you with the greatest marginal benefit.