As applied to the price level, the "rule of 70" indicates that the number of years required for the price level to double can be found by:
A. dividing 70 into the annual rate of inflation.
B. dividing the annual rate of inflation into 70.
C. subtracting the annual change in nominal incomes from 70.
D. multiplying the annual rate of inflation by 70.
B. dividing the annual rate of inflation into 70.
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Suppose a long lost relative died and left you a trust fund worth $1 million that you will receive ten years from now. What effect, if any, will this have on your demand for airline travel? (Assume that airline travel is a normal good.)
What will be an ideal response?
According to the ________ theory of regulation, regulators must take into account the preferences of legislators, consumers, and producers
A) capture B) general interest C) public interest D) share-the-gains, share-the-pains
Wage contracts, menu costs, and the minimum wage are explanations for why:
A. the aggregate demand curve slopes downward. B. there is little support for the existence of a real-balances effect. C. wages tend to be inflexible downward. D. competition results in price wars.
The policy irrelevance proposition implies that
A. unanticipated monetary policy actions are equally effective in stimulating both aggregate demand and aggregate supply. B. anticipated monetary policy actions are ineffective in generating changes in real Gross Domestic Product (GDP). C. anticipated monetary policy actions are effective in stimulating aggregate supply, but they are not effective in stimulating aggregate demand. D. anticipated monetary policy actions are effective in increasing real Gross Domestic Product (GDP), but they do not reduce unemployment.