EC201 chapter_7_Quiz Full

A growingper capitaoutput b rapidincrease

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ecession will lead to reduced output in the future, but inflation will lead to increased output in the future. D) A recession will lead to increased output in the future, but inflation will lead to decreased output in the future. Answer: B Diff: 2 Topic: Inflation Skill: Conceptual AACSB: Reflective Thinking 2 Tr ue /F al s e 1) The CPI overstates changes in the cost of living because it does not allow for substitutions that consumers might somewhat make in response to price changes. Answer: TRUE Diff: 3 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 2) A 100% increase in the price of salt changes the CPI more than a 10% increase in rent. Answer: FALSE Diff: 2 Topic: Inflation Skill: Fact 3) An inflation rate that is lower than expected benefits creditors. Answer: TRUE Diff: 3 Topic: Inflation Skill: Conceptual AACSB: Reflective Thinking 4) There are no costs associated with inflation if the inflation rate is perfectly anticipated. Answer: FALSE Diff: 2 Topic: Inflation Skill: Conceptual...
View Full Document

This note was uploaded on 11/13/2013 for the course BUSINESS EC201-03 taught by Professor Auguste during the Fall '13 term at Monroe.

Ask a homework question - tutors are online