Question 5

Which of the following statements is correct? Inflation

A. benefits creditors at the expense of debtors.

B. increases the purchasing power of the dollar.

C. increases the real value of savings.

D. arbitrarily "taxes" fixed income groups.

E. increases real wages.

Question 6

A farmer who has lost his farm due to increased agricultural productivity is considered

A. frictionally unemployed.

B. involuntarily unemployed.

C. structurally unemployed.

D. cyclically unemployed.

E. seasonally unemployed.

Question 9

The effects of inflation on the distribution of income are called

A. an incomes policy.

B. the equity effects of inflation.

C. the efficiency effects of inflation.

D. the output effects of inflation.

E. none of the above.

Question 10

A weakness of the Consumer Price Index is that

A. the base year changes from time to time.

B. the index includes all of the goods produced in an economy.

C. the bundle of goods in the index changes over time.

D. the index is unable to accurately reflect changes in the quality of goods over time.

E. the index only includes food items purchased by households.

Question 13

The effect of inflation on production and employment is known as

A. an incomes policy.

B. the equity effects of inflation.

C. the efficiency effects of inflation.

D. the output effects of inflation.

E. fiscal policy.

Question 15

Aggregate supply can be increased by

A. reduced incentives to save.

B. higher taxes.

C. increases in government spending.

D. policies to induce more saving.

E. none of the above.