What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?
a. It took $4.15 in 1950 to buy what $1 bought in 1982.
b. The average price level in 1982 was five times as high as in 1950.
c. $4.15 in 1950 had the same nominal money value as $1 in 1982.
d. It took $4.15 in 1982 to buy what $1 bought in 1950.
e. Nominal prices have increased by more than 400 percent between 1950 and 1982, but the real value of money has not changed.
d
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Consider two individuals, Kevin and Harris, who discount delayed utilities with a weight of 1/2 and 3/4, respectively
a) Who between the two individuals gives more weight to things that happen in the future? b) If consuming ice cream gives both Kevin and Harris benefits worth 8 utils instantly and has delayed costs of 15 utils, then comment on whether both individuals will want to consume ice cream. c) If the nearby ice cream parlor is closed for a week, will Kevin and Harris prefer to eat ice cream after a week, given that they have to decide today?
The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105 to 110.25. How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will increase since inflation increased. B) The unemployment rate will decrease since inflation increased. C) The unemployment rate will decrease since inflation decreased. D) The unemployment rate would not change since there is no change in the rate of inflation.