Exam 6: Fiscal Policy

Canadian economists who favour 'moderate' over 'low' inflation,that is,inflation in the range of 3% to 6% per year rather than lower,offer all of the following reasons for their preference EXCEPT

The consumer price index for a given year measures the cost of living in that year relative to

Suppose the interest rate on new issues of Canada Savings Bonds is 5% per year and the federal income tax rate on nominal interest earnings is 40%.If the inflation rate is 3%,then an investor's after-tax real rate of return on Canada savings Bonds is

The consumer price index (CPI)in 1931 was 8.2.The CPI in 1932 was 7.5.The rate of inflation between 1931 and 1932 was

Deflation is a situation in which the

If all prices,including the price of clothing,increased by 5%,then the relative price of clothing ________ and there ________ inflation.

The tendency for nominal interest rates to be high when inflation is high and to be low when inflation is low is known as

Changes in the average price level are called ________,while changes in the price of a specific good in comparison with other goods and services are called _______.

Unexpectedly low inflation ________ borrowers and ________ lenders.

The real wage is the wage

The Fisher effect is the tendency for _________ interest rates to be _________ when inflation is high.

This table shows the values of the Canadian consumer price index (CPI)for the years 1998 - 2005. -Using the data in the table above,the rate of inflation between 2003 and 2005 was

This table shows the values of the Canadian consumer price index (CPI)for the years 1998 - 2005. -Using the data in the table above,the rate of inflation between 2000 and 2001 was

A typical family on the Planet Econ consumes 10 pizzas,7 pairs of jeans,and 20 litres of milk.In 2011,pizzas cost $10 each,jeans cost $40 per pair,and milk costs $3 per litre.In 2012,the price of pizzas went down to $8 each,while the price of jeans and the price of milk remained the same.Between 2011 and 2012,a typical family's cost of living

The consumer price index (CPI)is all of the following EXCEPT the

The practice of increasing a nominal quantity each period by an amount equal to the percentage increase in a specified price index is called

The downward nominal wage rigidity hypothesis says that

A labour contract provides for a first-year wage of $10 per hour,and specifies that the real wage will rise by 3% in the second year of the contract.The consumer price index (CPI)is 100 in the first year and 107 in the second year.What dollar wage must be paid in the second year?

All of the following are nominal quantities EXCEPT the

The zero bound on nominal interest rate hypothesis claims that