The principal way in which inflation imposes costs upon the members of a society is by
A) destroying the incentive to consume.
B) increasing the cost of planning correctly.
C) lowering wages relative to prices.
D) making goods more scarce.
E) raising the percentage of the population below the official poverty line.
B
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A consumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket
A) equaled $160 in 1983. B) rose 160% from the cost of the market basket in the base year. C) rose 60% from the cost of the market basket in the base year. D) equaled $160 in 1996.
The thrust of government fiscal policy is expansionary when:
(a) Expenditure and taxation are increased. (b) Government expenditure is reduced and taxation is increased. (c) Expenditure and taxation are decreased. (d) Government expenditure is increased and taxation is reduced.
In the Santa Rita mines in Arizona in 1870, Mexican miners received about $12 per month while "American" miners received $70 . Although the wages of both groups tended to rise over time, the gap persisted until at least 1910 . Mexican and American miners did the same work and were equally productive. Economists call this pay differential: a. prejudicial differentials
b. compensating differentials. c. wage discrimination. d. job entry discrimination.
The change in consumption divided by a change in income is called the
a. consumption function b. marginal propensity to consume c. marginal propensity to spend d. spending function e. changing propensity to consume