Recall the Application about the impact inflation has on your potential future salary and the repayment of student loans to answer the following question(s).According to this Application, more years of work would be required to pay off a student loan if all prices (including your salary):
A. remained stable.
B. increased by 20 percent.
C. decreased by 10 percent.
D. increased by 40 percent.
Answer: C
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Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases
A) the demand for salsa decreases. B) the supply of salsa decreases. C) the demand for salsa increases. D) the demand for tortilla chips decreases.
In the 1990s Japan had the lowest interest rates in the world due to a combination of
A) inflation and recession. B) deflation and expansion. C) inflation and expansion. D) deflation and recession.
The ADS Business Conditions Index is a
A) leading index based on variables released with different frequencies. B) coincident index based on variables released with different frequencies. C) leading index based on 85 monthly variables. D) coincident index based on 85 monthly variables.
Sugar and coffee are complements. When the price of coffee decreases, the demand for sugar
A. will shift inward. B. will shift outward. C. remains constant. D. will fall.