We need to study a model in which real and nominal variables interact in order to understand how the economy works
a) in the short run but not the long run.
b) without regards to any time period, whether the short run or the long run.
c) in both the short run and the long run.
d) in the long run but not the short run.
Ans: a) in the short run but not the long run.
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Refer to Figure 2-8. Which country has a comparative advantage in the production of pineapples?
A) Costa Rica B) Guatemala C) They have equal productive abilities. D) neither country
Some economists argue that the increases in aggregate demand for output spurred by wartime spending, complemented by the strong spending in the private sector, impacted the U.S. economy by
(a) increasing production and employment. (b) increasing employment and income. (c) increasing income, thus fueling additional spending. (d) contributing to all of the above.
Warren always carries a one hundred dollar bill in case of emergencies. This is an example of the
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.
"Ceteris paribus" is a Latin expression that means "holding everything else constant."
a. True b. False Indicate whether the statement is true or false