The consumer price index (CPI) is a number that measures movements in the average (general) level of prices.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2In the rational expectations model, only unexpected or unpredictable changes cause unemployment to deviate from its natural rate.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3In which of the following countries are taxes (measured as a percentage of GDP) the lowest?
a. Canada.
b. France.
c. Sweden.
d. The United States.
QUESTION 4During periods of inflation, the general price level of goods and services in the economy rises.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Which of the following countries devote the smallest percentage of its GDP to taxes?
a. The United Kingdom.
b. Sweden.
c. Germany.
d. The United States.
QUESTION 6According to the theory of the political business cycle, the fed expands the money supply before presidential elections to stimulate the economy and favor the incumbent administration.
a. True
b. False
Indicate whether the statement is true or false