Other things equal, the equation for the real interest rate indicates that:
a. as inflation increases, the real interest rate will rise.
b. as inflation increases, the nominal interest rate will fall.
c. as inflation decreases, real income will fall.
d. as inflation decreases, the real interest rate will rise.
e. as inflation changes, the real interest rate will not change.
d
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Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?
A) Consumers' preferences changed in favor of digital cameras. B) technological advances in film camera production C) Workers who make cameras received a pay raise. D) The price of digital cameras increased.
In Figure 6-5, if price falls from point A to point B along the unit-elastic demand curve,
A. total expenditure remains unchanged. B. total expenditure increases. C. total expenditure decreases. D. total expenditure first increases and then declines.
Defenders of advertising argue that firms use advertising as a signal of quality, even if the advertising delivers little helpful information about the product
a. True b. False Indicate whether the statement is true or false
Based on the graphs for an increase in aggregate demand and the Phillips curve, we can see that when inflation is high, ______.
a. RGDP is low
b. unemployment is high
c. aggregate demand is weak
d. aggregate demand is strong