Suppose that the consumer price index (CPI) was 160 in 2010 and 166 in 2011, inflation during 2011 was
a. zero; prices were stable.
b. 3.8 percent.
c. 6 percent.
d. 66 percent.
B
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Janelle spends all of her income on songs from iTunes ($1 each) and applications ($5 each) for her iTouch. If she makes her best affordable choice, she purchases 20 songs and 4 applications, what is her real income in terms of applications?
A) 40 applications B) 4 applications C) 10 applications D) 20 songs
A Giffen good has
A) a positive substitution effect. B) a negative income effect. C) a larger income effect than substitution effect. D) All of the above.
When the Fed buys U.S. government securities from a bank, that bank's excess reserves and total reserves increase, but there is no change in required reserves
a. True b. False Indicate whether the statement is true or false
Most economists think that the economy's self-correcting mechanism is
a. relatively rapid. b. rapid in the short run and sluggish in the long run. c. sluggish in the short run and rapid in the long run. d. relatively sluggish.