Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year, your purchase of the shoes would:
A. make you an inflation winner as you saved $5 on the shoes.
B. make you an inflation loser as you paid $5 more than you should have for the shoes.
C. not be affected at all by the inflation rate.
D. be taxed according to COLA adjustments.
Answer: A
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Suppose there are two cities that have rent controlled apartments. In one city (Albany) all apartments are subject to rent control; in the other city (Halftrack) one-half of the apartments are rent controlled
Which of the following is most likely to be true? A) It will be impossible to rent an apartment in either city at any price. B) It will be difficult to find a rent-controlled apartment in Albany or Halftrack; rents for the Halftrack apartments not subject to controls will be higher than they would be without rent control. C) It will be easier to find an affordable apartment in Albany since rents will be low across the board. D) It will be easier to find an affordable apartment in Halftrack, either a rent-controlled apartment or another apartment, at a reasonable price.
The theory of creative destruction implies that too much competition leads to monopolies
Indicate whether the statement is true or false
An increase in net exports will shift the:
A. aggregate expenditures curve upward and the aggregate demand curve rightward. B. aggregate expenditures curve upward and the aggregate demand curve leftward. C. aggregate expenditures curve downward and the aggregate demand curve rightward. D. aggregate expenditures curve downward and the aggregate demand curve leftward.
If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, it was previously operating at
A) minimum efficient scale. B) more than minimum efficient scale. C) less than minimum efficient scale. D) minimum capacity.