During inflationary periods
A. all prices rise at the rate of inflation.
B. real wages must necessarily decline.
C. some prices may fall.
D. relative prices do not change.
Answer: C
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The decision about whether to use tax or spending mechanisms to implement expansionary fiscal policy is, in part, a ________________ decision rather than a purely economic one.
a. individual b. political c. local d. state
Suppose that in Australia, the government allows private ownership of chickens but not of cows. If the people of Australia permanently increase their desire to purchase more chicken and beef, in the long run, we would expect
a. the population of chickens to rise and the population of cows to fall. b. the population of cows to rise and the population of chickens to fall. c. the populations of both chickens and cows to increase. d. both chickens and cows to become extinct in Australia unless the government places the animals on the endangered species list.
An oligopolist does not spend money on advertising because consumers are rational in an oligopolistic market
a. True b. False Indicate whether the statement is true or false
A bank has $100 million of checkable deposits, $6 million of required reserves, and $2 million of excess reserves. What is the required reserve ratio?
A. 2 percent B. 3 percent C. 6 percent D. 12 percent