The market clearing assumption is
a. a central assumption of the short-run macro model
b. the idea that prices in every market will adjust until quantity supplied and quantity demanded are equal
c. the idea that excess supply always leads to an increase in demand
d. the idea that markets only work when they are in equilibrium
e. believed by most economists today to be an unreasonable assumption
B
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Corey deposits $1,000 in a savings account that pays an annual interest rate of 5 percent. Over the course of a year, the inflation rate is 1.7 percent. At the end of the year, Corey has
a. $17 more in his account, and his purchasing power has increased by $10. b. $30 more in his account, and his purchasing power has increased by $50. c. $40 more in his account, and his purchasing power has increased by $33. d. $50 more in his account, and his purchasing power has increased by $33.