16. The effects of inflation are seen in A. goods and services only B. wages and
ID: 1108373 • Letter: 1
Question
16. The effects of inflation are seen in A. goods and services only B. wages and income levels only C. services and wages only D. goods, services, wages and income levels 17. The difference between a budget deficit and the national debt is: a The national debt represents spending over revenues in the current year b. The deficit represents spending over revenues in the curreat year c. The deficit represents accumulated spending over revenues in all years added together d. the national debt represents accumulated spending in excess of revenues in all years added together e. Both b. and d. are correct 18. Unemployment is rising and GDP is decreasing. The economy is: A Entering a recession B. Reaching a peak C. In a trough D. Headed toward a recovery policy will cause a greater share of income to be collected from those with high incomes 19. A than from those with lower incomes A. proportiomal tax B. regressive tax C. progressive tax D. excise tax 20. The most commonly used measure of price changes in the U.S. economy is: a The PCE b. The Consumer Price Index c. the CPI price deflator 21. The discount rate is the rate at which: A. Consumers can take out personal loans from a bank B. The interest rate that credit card companies charge cardholders C. The rate at which banks can make overnight loans from the federal reserve D The rate which borrowers with the best credit rating get on a home mortgage 22. MI includes: A. checking accounts (demand depoaits) B. currency and coin held in our pocket C. traveler's checks D. All of the above 23. Which best describes the incentives that opected inflation provides to sellers/suppliers in the economy? A) Sellers will want to accept the offer from the lowest bidder B) Sellers will sell less now and wait until prices stabilize before making more purchases. C) Sellers will wait for the offer from the highest bidder D) Sellers will wast until prices fall before selling again 24.You recerve a 4% pay raise this year, at the same time, mnation rises by 6 % this year. A) Your purchasing power has increased B) It is impossible to tell what is happening to your purchasing power without further information C) Your purchasing power has declined D) Your purchasing power is unaffected by either inflation or the pay raise because they are expressed in aominal,Explanation / Answer
Answer 16 : The effect of inflation are seen in goods, services,wages and income levels. As we know inflation implies that pressure of increase in price accross all market area or in region. Inflation has affected all over the economy.
Answer 17 : The difference between budget deficit and the national debt are that deficit represent spending over revenue in the current year where as national debt means accumulated spending excess of revenue all year added together. As there is difference that budget deficit represent excess revenue minus expenses.
Answer 18 : Unemployment is rising and GDP is decreasing entering into recession because at that level of point the production has been decreased and the employment has been effected. The result is that economy reaches at level of recession.
Answer 19 : A Progressive Tax policy will cause a greater share of income to be collected from those higher income than from those with lower income. As progrssive tax rate has been increased with increasing rate of income.
Answer 20 : Consumer price index is the most commonly used measured in the price change in the US economy.
Answer 21 : Discount rate is the rate at which bank can make overnight loans from the federal reserve. In bank the fed bank want to generate higher interest rate from the bank to meet there overnight expenses.
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