The inflation rate is a:
a. percentage decrease in price level.
b. percentage increase in price level.
c. sustained increase in relative prices.
d. sustained decrease in relative prices.
e. sudden increase in the weighted average of all prices.
b
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When production of a good results in an external cost, the unregulated competitive market equilibrium is inefficient because ________
A) MSC = MC B) MSC = MB C) MSC > MB D) MSC < MB E) MSC is undefined
Suppose that investment is not very responsive to interest rates, so that a sizable increase in interest rates has only a minor effect on investment. In this case, monetary policy would have:
A. a massive effect on output. B. no effect on output. C. a modest effect on output. D. a substantial effect on output.
Zero-price products and services exist only in the technology sector.
Answer the following statement true (T) or false (F)
Which of the following statements about M1 and M2 is not true?
A. M2 is larger than M1. B. M2 is more liquid than M1. C. Transaction accounts are part of M2. D. Transaction accounts are part of M1.