Disinflation is
A. a sudden change in the normal behavior of inflation, unrelated to the nation's output gap
B. a negative inflation rate
C. a substantial reduction in the rate of inflation.
D. the same as hyper inflation
Answer: C
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After researching the effectiveness of child safety seats in reducing the accident death rate of children ages one to four, economist Steven Levitt found that
A) for children under age four, safety seats are safer than any alternative. B) for children under age two, safety seats are safer than any alternative, but beyond age two, they provide no appreciable benefit over standard car seat belts. C) safety seats are actually more dangerous than standard car seat belts for children of any age. D) safety seats provide no appreciable benefit over standard car seat belts for children of any age.
Under a fixed exchange standard, if the domestic demand for foreign exchange increases
A) the central monetary authority must meet the demand out of its reserves. B) the central monetary authority must increase the supply of domestic money. C) the fixed exchange standard will breakdown. D) inflation will increase. E) the domestic currency must be depreciated.
Oligopoly is an industry with a small number of firms producing homogeneous or differentiated goods with minimal barriers to entry
a. True b. False Indicate whether the statement is true or false
Figure 34-7
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In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. Pestoland has a comparative advantage in pasta because it
A. gets more pasta from a given decline in pesto than Pastaland does. B. gets more pesto from a given decrease in pasta production. C. can produce more pasta than Pastaland. D. can produce more pasta and pesto than Pastaland.