What is one way to avoid money illusion?
What will be an ideal response?
One way to avoid the problem of money illusion is to transform nominal dollar figures into real dollars (inflation-adjusted dollars). This allows more accurate comparisons between the dollar amounts over time.
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Horizontal summing of individual demands yields
a. the market demand for a private good b. the market supply of a private good c. the market demand for a public good d. the market supply of a public good
For social cooperation to be promoted, an effective system of property rights will be one in which people
A) behave cautiously and considerately because their rights are not clear. B) enjoy most rights in common with all other members of the society. C) know exactly what their rights are and don't expect them to change significantly. D) know their rights are always dependent upon continuing majority approval. E) realize the rules of the game can change at any moment.
Exports are not included in GDP because they do not reflect domestic consumption
a. True b. False Indicate whether the statement is true or false
Most firms are not monopolies in the real world because
a. firms usually face downward-sloping demand curves b. supply curves slope upward c. price is usually set equal to marginal cost by firms d. monopolies are not efficient e. there are substitutes for most goods