The price index was 150 in the first year, 160 in the second year, and 165 in the third year. Which of the following statements is correct?
a. The price level was higher in the second year than in the first year, and it was higher in the third year than in the second year.
b. The inflation rate was positive between the first and second years, and it was positive between the second and third years.
c. The inflation rate was lower between the second and third years than it was between the first and second years.
d. All of the above are correct.
d
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Suppose a country is much richer than the others in the Solow growth model. What happens in the long run?
A) The other countries catch up to the rich one. B) The rich country grows the fastest. C) The rich country becomes poorer than the others. D) Nothing.
Java Hut, a U.S. coffee retailer, buys $10 million worth of coffee beans from Colombia. It also pays $5 million for paper cups and utilities, all produced in the U.S. It sells the coffee it produces using the above inputs to U.S. consumers for $50 million. Overall how do these expenditure affect net exports? How do these expenditures effect U.S. consumption?