Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 1, Problem 6CQQ
To determine
Inflation and money supply.
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If a nation has high persistant inflation, the most likely explanation isa.the central bank creating excessive amount of money.b unions bargaining for excessive high wages.c.the government imposing excessive level of taxation.d.firms using their monoply power to enforce excessive price hike.
Which would likely increase the average level of interest rates for auto loans? Select one:
a. An increase in inflation.
b. An increase in the unemployment rate.
c. A decrease in the level of business investment.
d. A decrease in the amount of consumer spending.
The late 1970s were an extremely difficult time economically in the United States. Research an article about the economy at that time and post it with your discussion so the class can increase its knowledge on the topic. Suggested topics to investigate include inflation, mortgage rates, and gas prices from that era.
a. What could be the possible lessons we can take from that period that would be relevant for us today?
b. How has the USA addressed these issues in today’s economy so the issues do not occur again?
Chapter 1 Solutions
Principles of Economics (MindTap Course List)
Ch. 1.1 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.3 - Prob. 3QQCh. 1 - Prob. 1CQQCh. 1 - Prob. 2CQQCh. 1 - Prob. 3CQQCh. 1 - Prob. 4CQQCh. 1 - Prob. 5CQQCh. 1 - Prob. 6CQQCh. 1 - Prob. 1QR
Ch. 1 - Prob. 2QRCh. 1 - Prob. 3QRCh. 1 - Prob. 4QRCh. 1 - Prob. 5QRCh. 1 - Prob. 6QRCh. 1 - Prob. 7QRCh. 1 - Prob. 8QRCh. 1 - Prob. 9QRCh. 1 - Prob. 10QRCh. 1 - Prob. 1PACh. 1 - Prob. 2PACh. 1 - Prob. 3PACh. 1 - Prob. 4PACh. 1 - Prob. 5PACh. 1 - Prob. 6PACh. 1 - Prob. 7PACh. 1 - Prob. 8PACh. 1 - Prob. 9PACh. 1 - Prob. 10PACh. 1 - Prob. 11PA
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- The news says inflation rate has declined but fish is now more expensive. Is the news wrong? Explain.arrow_forwardThere are many kinds of pressure on economy. Explain some of them. Answer in a economic prospective.arrow_forwardWrite TRUE if the statement is right and FALSE if it is wrong: _____ 4. Inflation is the same with interest rate when you determine their percentage rates. _____ 5. Economics is NOT an abstract science. _____ 6. The model supply and demand is use to assess the potential impact of changes in the price that you charge for products and services.arrow_forward
- Consumer Price Index (CPI) or Retail Price Index (RPI) which is a better measure of Inflation for supermarkets?arrow_forwardIf a nation has high and persistent inflation, the most likely explanation is a. the government imposing excessive levels of taxation O b. unions bargaining for excessively high wages Oc. the government creating excessive amounts of money Od. firms using their market power to enforce excessive price hikesarrow_forwardWhich of the following scenarios involves a value judgement? a. What do prices represent in a market? b. How should the minimum wage be adjusted? c. What conditions enable monopolies? d. How does inflation relate to the business cycle? e. How do prices affect demand?arrow_forward
- The broken window fallacy a. explains why inflation is so high.b. is a justification for the government to print more money.c. is illustrated when a government program is justified not on its merits but on thenumber of jobs it will create.d. has nothing to do with public policy.arrow_forwardChapter 1, End of Chapter, PROBLEMS AND APPLICATIONS, Exercise 11 During the Revolutionary War, the American colonies could not raise enough tax revenue to fully fund the war effort. To make up the difference, the colonies decided to print more money. Printing money to cover expenditures is sometimes referred to as an “inflation tax.” Who do you think is being “taxed” when more money is printedarrow_forwardAnswer the questions about Keynes and his history. John Maynard Keynes famously said: "In the long run, the economy will decline." the government can solve all problems." we are all dead." the workers will revolt unless the government acts quickly." all you need is love." Keynes was an economist during the Great Depression. During the Great Depression there was low unemployment and low inflation. high unemployment and low inflation. low unemployment and high inflation. high unemployment and high deflation. high unemployment and high inflation.arrow_forward
- Achieving the Three Goals for the United States The government's role is to prevent unemployment and prevent inflation at the same time. If the government focuses too much on preventing inflation and slows down the economy, we will have unemployment. If the government focuses too much on limiting unemployment and overheats the economy, we will have inflation. Severity Unemployment 6% or less 6.5-8% 8.5% or more 1-4% 5-8% Inflation 9% or more GDP Growth 2.5-5% 1-2% .5% or lessarrow_forwardCountry has high and long-lasting inflation, the most likely reason is excessive money creation monoploy power excessive taxes unions barginging for higher pay a. monopoly power. b. excessive money creation. c. excessive taxes. d. unions bargaining for higher pay.arrow_forwardThe 9/11 terrorists who flew planes in the World Trade Center Towers caused a. a reduction in air travel b. an increase in highway travel c. an increase in deaths on american highways d. A & B e. A, B, and Carrow_forward
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