During the 1990s, Japan experienced periods of deflation and very low nominal interest rates, approaching zero percent. Why would lenders of money agree to a nominal interest rate of almost zero?
What will be an ideal response?
With the deflation, the real interest rate exceeded the nominal interest rate. Lenders were making their decisions based on the higher real interest rate, not the very low nominal interest rate.
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Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q218g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />If one store is located at A and the other store is located at C:
A. 100 people will certainly shop at each store, but where the other 100 will shop is indeterminant.
B. 100 people will shop at the store at A, and 200 people will shop at the store at C.
C. 200 people will shop at the store at A, and 100 people will shop at the store at C.
D. 150 people will shop at each store.
Figure 10-1
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If the profit-maximizing firm depicted in Figure 10-1 is perfectly competitive, how much output should it produce?
A. A B. B C. C D. D
Which of the following leads to a change in quantity supplied?
a. P1 moves to Q2
b. P2 moves to Q1
c. P1 moves to P2
d. P2 moves to P1
What are four significant reasons for studying resource pricing?
What will be an ideal response?