Over the past year price inflation has been 10%, but the price of a used Ford Escort has fallen from $6,000 to $5,000. The real price of a Ford Escort has fallen by:

If a competitive firm has to pay a lump sum tax, it will produce less

Indicate whether the statement is true or false

In order to make effective policy changes, policy makers need to know

a. where the economy is going to be six to twelve months from now. b. the magnitude of past recessions. c. Keynesian economics. d. the exact size of the current M1 money supply.