Many central banks around the world target an inflation rate of about ________, because of upward bias in measured inflation and to reduce the risk of deflation.
A. 2%.
B. -2%.
C. 5%.
D. 0%.
Answer: A
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Along a short-run Phillips curve, the
A) long-run cost of lower inflation is higher unemployment. B) short-run cost of lower unemployment is higher inflation. C) short-run cost of lower inflation is higher interest rates. D) short-run cost of higher inflation is a higher real interest rate. E) short-run benefit of lower unemployment is lower inflation.
Economic growth can be pictured in a production possibilities curve diagram by
A) shifting the production possibilities curve in. B) shifting the production possibilities curve out. C) making the production possibilities curve straighter. D) moving from a point inside the production possibilities curve to a point on the curve.
A television station reports that the price of coffee has increased but the quantity sold in the market has decreased. This situation would be caused by a(n):
a. Decrease in supply b. Decrease in demand c. Increase in demand d. Increase in supply
The government imposes a luxury tax on automobiles that cost more than $40,000. As a result, fewer individuals purchase cars that cost more than $40,000. This is an example of
A. tax shifting. B. tax evasion. C. tax equity. D. tax incidence.