When the total value of final goods and services is calculated using current prices, the resulting measure is referred to as

Which of the following is true of inflation?

a. It is an increase in the general price level of goods and services. b. The purchasing power of money increases as the result of inflation. c. Inflation is similar to interest payments on future money income, such as pensions and receipts from outstanding loans. d. Inflation has no effect on real income.

In arriving at the quantity of output and price of its product, a company

a. chooses either output or price, and consumer demand determines the other. b. has no control over either quantity or price. c. makes two decisions by setting both optimal output and optimal price. d. generally leaves both quantity and price decisions to consumers.