Expected inflation is
A. the inflation rate minus the actual growth rate.
B. the inflation rate that governments require from year to year.
C. the inflation rate that consumers and businesses expect will hold for some time in the future.
D. the inflation rate that is based on GDP growth.
Answer: C
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Which of the following will make the real-world money multiplier smaller than the theoretical formula?
a. Banks actually hold fewer reserves than technically required by the Fed. b. Banks actually make loans for more money than they have in excess reserves. c. Banks may keep some excess reserves rather than loan it all out. d. Both a. and b. above are correct.
The marginal revenue product curve of a factor is negatively sloped because:
a. the additional revenue generated from an additional unit of a factor remains constant as more resources are hired. b. the additional revenue generated from an additional unit of a factor declines as more resources are hired. c. the additional revenue generated from an additional unit of a factor usually becomes zero as more resources are hired. d. the additional revenue generated from an additional unit of a factor increases as more resources are hired. e. the additional revenue generated from an additional unit of a factor doubles every time new resources are hired.
The demand schedule for a good
a. indicates the relationship between the price of the good and the price of other goods. b. indicates the quantities of the good that people will buy at various prices. c. illustrates the quantity producers will provide at alternative prices. d. is determined primarily by the cost of producing the good.
The Cost-Benefit Principle:
A. describes how people behave once they have enough education. B. provides an abstract model of how people should choose between alternatives. C. provides little insight into how people actually chose between alternatives. D. fully captures how people choose between alternatives.