Exhibit 7-1 Consumer Price Index
Year
ConsumerPrice Index
1
100
2
110
3
115
4
120
5
125
As shown in Exhibit 7-1, the rate of inflation for Year 2 is:
A. 5 percent.
B. 10 percent.
C. 20 percent.
D. 25 percent.
Answer: B
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Dan has a car valued at $10,000 that gives him a utility of 50 units. There is a 10 percent chance that he will have an accident that will make his car worthless, in which case his utility will be zero
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The quantity of reserves demanded equals
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Assume that seigniorage and the government's primary deficit are both zero. A change in the debt-to-GDP ratio depends on just
A) the rate of inflation and total factor productivity. B) the growth rate of real GDP and the real interest rate. C) the growth rate of the money supply and the nominal interest rate. D) the growth rate of nominal GDP and the rate of inflation.
Determine the deposit/refund amount that achieves an efficient solution.
State officials are establishing a deposit/refund system for batteries. Marginal costs and benefits have been estimated to be: MPC = 5 + 0.5Q MPB = MSB = 20 – 0.5Q MSC = 5 + 0.7Q, whereQ is in millions, and the marginal cost and benefit values are in dollars per battery.