Core inflation is a measure of:
A. the change in the Consumer Price Index with durable goods excluded.
B. an overall rise in prices in the economy.
C. inflation that excludes goods with historically volatile price changes.
D. the Consumer Price Index with durable goods excluded.
Answer: C
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Shoe-leather costs of inflation arise from the
A) increasing costs of apparel (clothes and shoes) as inflation rises. B) decline in the use of money as a unit of account. C) increase of velocity as inflation rises. D) confusion that results from higher inflation. E) increasing costs of agricultural products as inflation rises.
Based on this graph, in order for supply-side policies to move equilibrium to point E2, ______.
a. long-run aggregate supply and short-run aggregate supply must shift rightward, and aggregate demand must remain unchanged
b. aggregate demand must shift rightward, and long-run aggregate supply and short-run aggregate supply must remain unchanged
c. long-run aggregate supply and short-run aggregate supply must shift leftward, and aggregate demand must shift rightward
d. long-run aggregate supply, short-run aggregate supply, and aggregate demand must all shift rightward