As production of a good increases, opportunity costs rise because:
A. there will be more inefficiency.
B. people always prefer having more goods.
C. of inflationary pressures.
D. workers are not equally suited to all tasks.
Answer: D
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In the United States, monetary policy is carried out by
A) the Federal Reserve System. B) Congress. C) the President. D) Congress and the President acting together.
An increase in aggregate demand will reduce the unemployment rate only if the ensuing inflation is anticipated
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1) During the past ten years, the annual rate of inflation in the United States has averaged less than 1 percent. 2) If the price level doubled in a 23-year period, we can conclude that the average annual rate of inflation over that period was about 3 percent. 3) Unanticipated inflation benefits debtors at the expense of creditors. 4) Unanticipated inflation helps some groups in the economy. 5) If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the inflation premium is 13 percent.
Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the population of the group of people likely to buy a good?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figure 4