Suppose that the consumer price index (CPI) was 160 in Year X and 166 in Year Y, inflation during Year Y was approximately:
a. zero; prices were stable.
b. 3.8 percent.
c. 6 percent.
d. 66 percent.
b
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The maximum increase in the money supply possible from a deposit of $D into the banking system where R is the reserve requirement is
A. (1 / R)(D? R). B. R× D. C. (1 / R)(1 ? R)D. D. (1 / R)D.
Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3 pounds of beef stew a month. If everything else is held constant, we know that
A) hamburger is an inferior good and beef stew is a normal good for Sarah.
B) hamburger is a normal good and beef stew is an inferior good for Sarah.
C) both hamburger and beef stew are normal goods for Sarah.
D) both hamburger and beef stew are inferior goods for Sarah.