Which of the following is a valid comparison of real and nominal GDP?
What will be an ideal response?
Real GDP adjusts for inflation and nominal does not.
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In a competitive industry, each firm has a cost function 
(for a given set of input prices). Demand for the industry's output is 
. The (long run) equilibrium number of firms is
A. 120 B. 58 C. 46 D. 34 E. 29 F. 12 G. 2 H. None of the above
A large part of the principal-agent problem stems from the desire of
A) agents to work hard. B) agents to avoid working. C) principals to work hard. D) principals to avoid working.
Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a good. Calculate the income elasticity of demand for the good and determine what type of good it is
What will be an ideal response?
If the long-run aggregate supply curve is vertical
A) the short-run Phillips curve must be vertical. B) the economy stays at the natural rate of inflation in the long run. C) the trade-off between unemployment and inflation cannot be permanent. D) unemployment and inflation are positively related in the long run.