Stable inflation implies:
A. that the rate of inflation conceals relative price changes.
B. that inflation is predictable.
C. that the rate of inflation averaged over many years is zero.
D. low rates of unemployment.
Answer: B
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Assume the asset market is always in equilibrium. Therefore a fall in Y would result in
A) higher inflation abroad. B) a decreased demand for domestic products. C) a contraction of the money supply. D) a depreciation of the home currency. E) an appreciation of the home currency.
The presence of insurance, by partially insulating both consumers and providers from bearing the full cost of the health care services provided, can create what economists have identified as
A. adverse selection problems. B. third-party payer problems. C. moral hazard problems. D. all of the options are correct.
What makes a grim trigger strategy "grim" is:
A. if one player overprices, then the other overprices to the point of zero quantity demanded. B. if one player underprices, then the other player notifies the Federal Trade Commission. C. if one player underprices, then the other player is driven out of the market. D. if one player underprices, then the other player drops the price so far that profits for both firms are zero.
When marginal costs are rising
A. average physical product is falling. B. marginal physical product is also rising. C. marginal physical product is falling. D. average physical product is rising.