When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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A person who purchased a house with a small down payment just before an unanticipated inflation hits has ________ from the decision to be in debt, and has ________ by having an asset in the form of a house
A) benefited, benefited again B) benefited, been hurt C) been hurt, benefited D) been hurt, been hurt again
Grace maximizes her utility by consuming both gourmet cookies and ice cream. If the price of a dozen cookies is three times that of a pint of ice cream, we would expect that: a. the total utility of a dozen cookies is three times that of a pint of ice cream
b. the total utility of a dozen cookies is one-third that of a pint of ice cream. c. the marginal utility of the last dozen cookies is three times that of the last pint of ice cream. d. the marginal utility of the last dozen cookies is one-third times that of the last pint of ice cream.
The expenditure schedule includes the consumption function
a. True b. False Indicate whether the statement is true or false
Which of the following is an advantage of using money as a medium of exchange?
A) It simplifies purchases because all prices are specified in money values. B) There is no interest charged on using money for purchases. C) It is easy to mass produce money. D) It avoids having to rely on barter, the exchange of one good or service for another.