A market basket:
A. is a tool devised to track how changing prices affect consumers.
B. includes all the goods and services produced in an economy.
C. includes all the goods and services consumed in an economy, including imports.
D. includes all the goods and services consumed in an economy, including net exports.
A. is a tool devised to track how changing prices affect consumers.
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According to the Taylor rule, if the inflation rate in the last year was 2% and output was equal to its full-employment level, the nominal Fed funds rate should be
A) 3%. B) 4%. C) 5%. D) 6%.
The theory of oligopoly provides a reason why
a. perfect competition is not a useful object of study. b. price is less than marginal cost for many firms. c. all countries can benefit from free trade among nations. d. firms do not want to capture larger shares of their markets.
Other things remaining unchanged, if American exports to Japan increase and American imports from Japan decrease, then under a floating exchange-rate system, we would expect
A. the yen value of a U.S. dollar to be higher in Tokyo than in New York. B. the U.S. dollar to appreciate. C. the supply curve of Japanese yen to shift inward. D. the demand for Japanese yen to increase in the foreign exchange market.
You accidentally run into your next door neighbor's fence and destroy it. Your neighbor sues you and you are required to pay $1,000 to repair the fence. This is an example of
A. the free-rider problem. B. a liability rule. C. the Coase theorem. D. an injunction.