1. Which of the following is true if the amount of inflation is correctly predicted?

the costs would be so large the Fed would work to reduce the inflation rate to zero

there would be no costs to inflation

the costs to inflation would be minor

1. Say that all nominal wages and nominal interest rates were automatically adjusted for inflation. That is, if inflation was 2% you would automatically receive 2% more pay and interest. What would happen to the costs of unanticipated inflation as a result?

they would fall

they would rise

there would be no change

3.Say that real GDP per person in a country grew from $10,000 to $20,000 in 7 years. The rate of growth of real per capita GDP would be about ___ .

5.00%

10%

2.50%

7.50%

4.The Rule of 70 is best described as which of the following?

estimating the time it takes anything to double in size

estimating the time it takes real GDP to double in size

explaining why a country grows

explaining why prices rise

5.Friendship between two people would be a good example of a zero-sum activity.

false

true

6.According to one of the assigned articles, good "institutions" seem to help poor countries grow.

false

true

7.Say that you had data on the nominal price of gasoline for each year from 1950 to 2020. With the CPI you converted the nominal price of gasoline from 1950 to 2020 values and found it was $3.50 while the nominal price today was $2.50. What does this tell you?

that gasoline has been cheaper compared to other goods

that gasoline has become more expensive compared to other goods

that real consumer income has fallen

that real consumer income has risen