Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basket's cost was $80.00; in 2013, the basket's cost was $84; and in 2014, the basket's cost was $87.60 . The value of the CPI was
a. 100 in 2012.
b. 105 in 2013.
c. 109.5 in 2014.
d. All of the above are correct.
d
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Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?
a. Tell Peter that the shareholders want to earn a large profit this year. b. Stop paying Peter bonuses based on how much he's sold. c. Allow Peter to set his own schedule and work from home frequently. d. Pay Peter an above-equilibrium wage.
According to economic reasoning, you should offer one hour of volunteer service per week when Select one:
a. The total benefits of doing so are less than the total costs. b. The additional costs of doing so are great than the additional benefits. c. The additional costs of doing so are the same as the additional benefits. d. The additional benefits of doing so are greater than the additional costs.
If the nominal interest rate is less than the real interest rate, we know that
A) both the nominal or real interest rate must be negative. B) the nominal interest rate must be equal to expected inflation. C) expected deflation must be occurring. D) expected inflation must be positive. E) expected inflation must be zero.