The most that someone would pay today to receive a certain sum at some point in the future is known as
A) the interest rate.
B) present value.
C) future value.
D) economic profit.
B
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The upward slope of the MP curve indicates that
A) the central bank lowers real interest rates when inflation rises. B) the central bank raises real interest rates when inflation falls. C) the central bank raises nominal interest rates when inflation rises. D) the central bank raises real interest rates when inflation rises.
Tobacco prices fell dramatically in the early 1600s in spite of demand increases because:
a. supply was also increasing. b. supply was decreasing. c. new farming machinery was introduced. d. the colonial government provided agriculture subsidies for tobacco farmers.
The substitution effect will never induce a consumer to buy more of a good when its price increases
a. True b. False
For a monopolistically competitive firm, which of the following is ensured by product differentiation?
a. Long-run profit b. Market power c. Economies of scale d. Increasing returns to scale