test_2d - Name: _ Date: _ 1. If the economy grew at a 3%...

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Date: _____________ 1. If the economy grew at a 3% rate this year and average prices grew ______, people would be better off on this year compared with last year. A) 3% B) faster than 3% C) slower than 3% D) faster than 10% 2. Inflation is when there is: A) a rising aggregate price level. B) an expansion of output. C) a rise in wages. D) a rise in the unemployment rate. 3. If a Japanese car costs ¥5,000,000 and the exchange rate is 100 Japanese yen per U.S. dollar, other things being equal, the car would cost an American: A) $50,000. B) $25,000. C) $10,000. D) $5,000. 4. Because capital flows allow some countries to spend more on additions to their productive capacity than they would have been able without capital flows, in the long run, they experience: A) higher interest rates. B) higher inflation. C) a higher standard of living. D) none of the above. 5. Historical evidence shows that over: A) an extended period of time, long-run growth is just as important as the business cycle in determining a country's living standards. B) short periods of time, long-run growth is less important than the business cycle in determining a country's living standards. C) an extended period of time, long-run growth is much more important than the business cycle in determining a country's living standards. D) long periods of time, it is difficult to determine whether the business cycle or long-
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test_2d - Name: _ Date: _ 1. If the economy grew at a 3%...

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