If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?
A) 30 percent
B) 13.6 percent
C) 12.2 percent
D) 20 percent
B
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The higher the interest rate, the greater the preference for liquidity
a. True b. False Indicate whether the statement is true or false
The metaphor used to describe the working of the price system to achieve efficiency in a free market is
A. Occam’s razor. B. the prisoner’s dilemma. C. the invisible hand. D. the benefit principle.
The country of Zincosa is in an economic slump with a very high unemployment rate. The stock market has crashed, and business confidence is at a low. Interest rates have fallen to 0.05, and the economy is in a liquidity trap. Facing such a crisis, the central bank of the country decides to purchase billions of dollars in bank debt and securities. Which of the following factors would most likely
have influenced the central bank to take such a step? a. The crash of the stock market b. A high rate of inflation c. A low rate of inflation d. The low interest rates
Which of the following is upward-sloping?
a. both the long-run and the short-run Phillips curve b. neither the long-run nor the short-run Phillips curve c. the long-run Phillips curve, but not the short-run Phillips curve d. the short-run Phillips curve, but not the long-run Phillips curve