When people mistake changes in nominal prices for changes in real prices, what has occurred?
A. Money confusion
B. Price illusion
C. Price confusion
D. Money illusion
Ans: D. Money illusion
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The money multiplier determines how much
A) real GDP will be expanded given an increase in autonomous investment. B) the monetary base will be expanded given a change in the quantity of money. C) the quantity of money will be expanded given a change in the monetary base. D) money demand will expand given a change in the quantity of money.
The additional revenue a firm obtains from employing one more unit of capital is called the
a. marginal revenue product of capital b. total product of capital c. marginal product of capital d. production function e. marginal product of labor
The consumption function shows
a. the relationship between consumption and saving b. the relationship between consumption and real disposable income c. the relationship between consumption and real income d. the relationship between consumption and nominal income e. the relationship between total consumption and consumption for durable goods
An appreciation in the value of the dollar would
a. make U.S. goods less expensive to foreigners. b. encourage U.S. consumers to buy more foreign goods. c. increase the number of dollars that could be purchased with a Mexican peso. d. discourage U.S. consumers from traveling abroad.