Which of the following is the best example of a microeconomic topic?
a. The impact that the money supply has on inflation.
b. The reasons for increases in the price of soft drinks.
c. The effect that federal budget deficits have on the interest rate.
d. The tradeoff between inflation and unemployment.
b
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The bias in the CPI affects government outlays because the overstatement of inflation
A) means that tax receipts are less than what is needed to cover government outlays. B) decreases government outlays by more than what is justified. C) increases government outlays by more than what is justified. D) decreases social welfare benefits. E) increases fiscal pressure.
Suppose an economy has the following characteristics: 100 people in the noninstitutional population; 40 people employed; 50 people not in the labor force. What's the unemployment rate?
A) 10 percent B) 15 percent C) 20 percent D) 40 percent E) 50 percent