Question

1, 2, 3 and 4 please!

Question 1 According to the theory of comparative advantage, trade wars are country involved andfor the smaller country involved. for the larger a) Good, Bad b) Bad, Good c) Good, Good d) Bad, Bad Question 2 the stated goal of the Federal Reserve is a) 0 inflation- prices should be consistent over time b) 2% inflation but only considering food and energy prices c) 2% "Core" inflation ignoring food and energy prices d) 2% overall inflation Question 3 When hyperinflation is expected to occur in the near future we expect... a) For consumers to hold on to their money to spend in the future b) Real GDP to increase c) Nominal GDP to decrease d) For consumers to spend their money as quickly as possible because consumers want assets that will hold their value. This creates disruptions in economic activity Question 4 Suppose a certain job paid S4 an hour in 1973 when the CPI was 42. Suppose that today the CPI is approximately 252 What nominal salary would be comparable to 1974's $4 in real terms? This job would have to pay S an hour a) 16 b) 24 c) 22 d) 28 e) 36 t 20

Answer 1

Option (d) Trade wars are bad for both smaller as well as larger countries involved in trade. Option (c) The stated goal of the Federal Reserve is 2% core inflation ignoring food and energy prices. Option (d) In the case of hyperinflation, the consumer will spend their money as quickly as possible because consumers want assets that will hold their value. This creates disruption in the economic activity. $ 4/hour, CPI = 42 CPI = 252 option f. The Rate of inflation = CPI_t -- CPI_b times 100/CPI_ = 252 - 42/42 times 100 = 50% Thus, $4 is equal to $20 with 50% inflation rate.