Over the past century, the average household income in the United States
A. has increased in nominal terms but has decreased in real terms.
B. has increased in nominal terms but has remained constant in real terms.
C. has increased in real terms.
D. has increased only marginally both in real and nominal terms.
Ans: C. has increased in real terms.
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Figure 2-9
Assume that the publishing industry produces novels and textbooks, as shown in the production possibilities frontier in . Moving from point H to G, the opportunity cost of those five additional textbooks equals
a.
0.5 novels
b.
10 million novels
c.
3 novels
d.
8 novels
e.
2 novels
A problem with a precommitment policy is that it:
A. locks the Fed into contractionary policy. B. determines the Fed's response for a period of time. C. binds the hands of the Fed from responding to unexpected events. D. will cause the Fed to lose credibility.
The decision to enter or exit an industry is known as the
A. Production decision. B. Profit maximization decision. C. Investment decision. D. Output decision.
Given the accelerationist Phillips curve ?? = - 0.3 (U - 6 ) + ?, suppose that inflation in the preceding period was 3 percent, unemployment is 7 percent, and there is no price shock. The current inflation rate is ________
A) 2.7 percent B) 3 percent C) 0.9 percent D) 3.3 percent E) none of the above