When taxes increase, interest rates
a. increase, making the change in aggregate demand smaller.
b. increase, making the change in aggregate demand larger.
c. decrease, making the change in aggregate demand smaller.
d. decrease, making the change in aggregate demand larger.
a
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The most common definition that monetary policymakers use for price stability is
A) low and stable deflation. B) an inflation rate of zero percent. C) high and stable inflation. D) low and stable inflation.
The primary reason for the recent reduction in the number of banks is
A) bank failures. B) re-regulation of banking. C) restrictions on interstate branching. D) bank consolidation.
The "core" inflation rate is typically defined as the change in consumer prices for all goods included in the CPI basket except energy and food products
Suppose the overall inflation rate based on the CPI was 4 percent for the past year, and energy and food prices did not change during the year. Is the core inflation rate for the past year higher or lower than 4 percent? A) Higher B) Lower C) They are the same D) We do not have enough information to answer this question
Two economists from Ohio University estimated that the demand curve for kerosene in Indonesia was such that a 10 percent increase in the price reduced the quantity demanded by 2.2 percent and that a 10 percent increase in the price of electricity increased the demand for kerosene by 1.6 percent. This indicates that (i) the demand for kerosene is price inelastic and (ii) kerosene and electricity
are substitutes. Which of these two statements is correct? a. i and ii b. i not ii c. ii not i d. neither i nor ii