Author Question: Refer to Table 20-10. Suppose an economy has only three goods and the typical family purchases the ... (Read 74 times)

strangeaffliction · **on:** Jun 29, 2018

Refer to Table 20-10. Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the CPI for 2016?

A) 14.3 B) 87.5 C) 114.3 D) 160

Question 2

Refer to Figure 28-2. Suppose the economy is at point A. The Fed uses expansionary monetary policy to lower the unemployment rate permanently below the level associated with A. Which of the following will occur?

A) Inflationary expectations will decline. B) Unemployment will rise above the natural rate.
C) Unemployment will accelerate in the long run. D) Inflation will accelerate in the long run.