If individuals have money illusion then they
A) think that money is worthless.
B) ignore the effects on their income or wealth of some price changes in the economy.
C) they base their production and consumption decisions on relative rather than absolute prices.
D) Both B and C.
B
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If people expect the foreign exchange rate for dollars to rise in the future
A) the demand for dollars today decreases. B) the demand for dollars today increases. C) the demand for dollars today is unaffected. D) there is a movement along the demand curve for dollars.
Profits earned in the United States by a foreign-owned firm would be included in
a. gross domestic product and gross national product. b. gross national product but not in gross domestic product. c. gross domestic product but not in gross national product. d. neither gross domestic product nor gross national product.
Figure 7-10
In Figure 7-10, the curve labeled C is
a.
average fixed cost.
b.
average total cost.
c.
average variable cost.
d.
marginal cost.
Exhibit 4-2 Supply and demand curves
The market shown in Exhibit 4-2 is initially in equilibrium at E1. Changes in market conditions result in a new equilibrium at E2. This change is stated as a(n):
A. increase in supply and an increase in quantity demanded. B. increase in supply and a decrease in demand. C. decrease in supply and a decrease in quantity demanded. D. increase in demand and an increase in supply.