Suppose the economy is currently experiencing 6% inflation per year. If the Fed wants to reduce inflation to 2% and the sacrifice ratio is 5, then how much annual output must be sacrificed in the transition?
a. 5%
b. 10%
c. 15%
d. 20%
d
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If the price of automobiles was to increase, then
A) the quantity of gasoline demanded would decrease. B) the demand for gasoline would increase. C) the demand for gasoline would decrease. D) the supply of gasoline would increase.
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.
In a graph of the production possibilities curve, the two axes of the graph indicate the:
A. Prices of the two products that a nation can produce B. Maximum quantities of the two resources that a nation possesses C. Price of the products on the vertical axis, and quantities on the horizontal D. Quantities of the two products that a nation can produce
Which of the following will strongly influence a nation's level of trade?
a. A size of its economy, its geographic location, and its history of trade b. size of its government, its history of trade, and its geographic location c. government trade policy, its history of trade, and the size of its economy d. ratio of exports to GDP, balance of trade, and government trade policy