Why do negative supply shocks present such a difficulty for the Federal Reserve?
a. the Fed can choose to fight the rising price level, but this will result in lower unemployment.
b. the Fed can choose to fight the rising unemployment, but this will result in an even lower price level.
c. the Fed can choose to fight the falling unemployment, but this will result in an even higher price level.
d. the Fed can choose to fight the rising unemployment, but this will result in an even higher price level.
e. the Fed can choose to fight the rising unemployment, but this will result in higher taxes.
D
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Factories and machines are examples of:
A. capital goods. B. consumption goods. C. non-market goods. D. value-added goods.
The CPI market basket
A) weights the goods and services according to the budget of an average urban household. B) determines the best possible way of taxing the average urban household. C) determines how the spending patterns of the average urban household change from month to month. D) determines how spending patterns change from urban household to urban household. E) changes from one month to the next in order to calculate the CPI.
What does the term "marginal" mean in economics?
A) the edge of a market B) secondary C) an additional or extra D) trivial E) illegal
Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P. Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort. What is the price?
a. 20 b. 40 c. 60 d. 80