(Table: Peanut Butter and Jelly) Look at the table Peanut Butter and Jelly. Supp
ID: 1121991 • Letter: #
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(Table: Peanut Butter and Jelly) Look at the table Peanut Butter and Jelly. Suppose a market basket consists of 20 jars of peanut bufter and 10 jars of jelly. If 2012 is the base year, what is the rate of inflation between 2013 and 2014? A) 10.1% B) 22.5% C) 4.9% D) 11.25% 7. 8. According to the rule of7o, if real GDP per capita is growing at 2% a year, in 100 years it wil have increased by A) almost 30 times. B) almost 60 times C) D) about 7 times. about 4 times. 9. The real interest rate is the nominal interest rate less the rate of inflation. A) True B) False 10. The marginal propensity to save is the increase in household savings when investment spending increases by $1. A) True B) False 11. In periods of inflation, lenders benefit because the money that they are repaid has more purchasing power than the money they loaned intially A) True B) False 12. Commodity-backed money is: A) equivalent to commodity money B) gold and silver coins used for exchange. C) a medium of exchange with no intrinsic value. D) a medium of exchange with alternative economie uses. 13. The rule of 70 states that a variable's approximate doubling time equals A) B) C) D) 70 divided by the growth rate. 70 times the growth rate. the growth rate divided by 70. 70 divided by the doubling time. Monetary policy affects both the aggregate price level and output in the long run. A) True B) False 14.Explanation / Answer
9. True
Real interest rate = Nominal interest rate - Inflation
10. False
MPS is the change in savings when income of person changes. It show how much saving of person increases when income of person increases.
11. False
Purchasing power decreases when inflation occurs so lender receives less value of money that lender lent. So, lender looses and borrowers gain.
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