What is core inflation? Why is it used?
What will be an ideal response?
Core inflation refers to the calculation of inflation without food and energy items included in the price index. The reason that food and energy prices are removed from the inflation calculation is that they are quite volatile and thus mask what the underlying inflation rate is for core items in the price index.
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Refer to the figure above. What is the equilibrium price and quantity of the good?
A) Equilibrium price = $40, equilibrium quantity = 20 units B) Equilibrium price = $60, equilibrium quantity = 10 units C) Equilibrium price = $60, equilibrium quantity = 20 units D) Equilibrium price = $80, equilibrium quantity = 30 units
Which one of the following is presently a major deterrent to bank panics in the United States?
A. The legal reserve requirement. B. The fractional reserve system. C. The gold standard. D. Deposit insurance.