The Fed uses a "core" price index, one that excludes food and energy prices to measure inflation. It does so because
A) food and energy have inelastic demand curves and consumers will buy them regardless of their price.
B) food and energy prices have wide swings that are not related to the causes of general inflation.
C) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation.
D) it wants to avoid the blame for high gasoline prices causing inflation.
B
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If the natural unemployment rate is 4 percent and potential GDP is $30 billion, then according to Okun's Law, when the unemployment rate falls to 3 percent, real GDP
A) decreases to $29.4 billion. B) first decreases by 4 percent and then increases by 4 percent. C) increases to $60 billion. D) increases to $30.6 billion. E) remains constant at $30 billion.
In a recession, needs-tested spending ________ and induced taxes ________
A) increases; increase B) increases; decrease C) decreases; increase D) decreases; decrease E) increase; do not change
Compared to perfect competition, a monopoly in the long run
A. produces a larger output. B. charges a higher price. C. produces the minimum average cost. D. All of these responses are correct.
When the 2010 Patient Protection and Affordable Care Act is fully implemented, it will
a. set the prices (reimbursement rates) for more than 7,000 . different medical procedures. b. increase the supply of doctors and other medical services. c. increase the supply of doctors and other medical services. d. reduce the share of health care expenses paid for by a third party, which will increase the incentive of both consumers and medical providers to economize. e. All of the above are true.