In Figure 20.2, the increase in Real GDP might reflect 
A. increased marginal tax rates on capital income.
B. increased raw materials prices.
C. increased standards of environmental protection.
D. increased education among workers.
Answer: D
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The Fed uses a "core" price index, one that excludes food and energy prices to measure inflation. It does so because
A) food and energy prices have wide swings that are not related to the causes of general inflation. B) food and energy have inelastic demand curves and consumers will buy them regardless of their price. C) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation. D) it wants to avoid the blame for high gasoline prices causing inflation.
List two things that can cause the industry supply curve to shift
What will be an ideal response?