Exam 3 Section 3 MC – Flashcards
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If households become more patient and capital becomes less productive, we would correctly conclude that:
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b. investment spending would be indeterminate but the interest rate would be lower.
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A firm can fund an expansion of its operations by
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a. issuing bonds
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If 51% of all goods in the CPI became more expensive and 49% became cheaper:
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c. inflation or deflation could occur, depending on the weights of those goods and the actual percent changes in price.
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Which of the following describes a situation in which the person is hurt by inflation?
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d. a person paid a fixed income during an inflationary period.
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Assume the price of salt increased from $0.30 in 1985 to $0.50 in 1995. If we calculate the average price increase for salt over this period, we could accurately say
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b. the price of salt increased about 5% per year.
