________ inflation is more stable than __________ inflation, because it excludes food and gasoline prices.
A. Core; headline
B. Headline; core
C. Core; nominal
D. Nominal; core
A. Core; headline
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The division of labor can benefit society only if
A. a system of exchange exists. B. society uses all of its resources efficiently. C. society has no specialized resources. D. labor resources are not scarce.
The substitution effect and the output effect
A. always work in the same direction. B. sometimes work in the same direction. C. always work in the opposite direction. D. sometimes work in the opposite direction.
In analyzing the operation of a firm, an economist assumes the firm wants to
A. maximize total profits. B. maximize total revenue. C. maximize total production. D. maximize total sales.
The Fed uses a "core" price index, one that excludes food and energy prices to measure inflation. It does so because
A) food and energy prices have wide swings that are not related to the causes of general inflation. B) food and energy have inelastic demand curves and consumers will buy them regardless of their price. C) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation. D) it wants to avoid the blame for high gasoline prices causing inflation.