In Year 1, the price level was 120 and the average nominal income was $30,000. In Year 2, the price level was 125 and the average nominal level of income was $32,000. What happened to real income from Year 1 to Year 2?
A. It fell by $400
B. It rose by $400
C. It rose by $600
D. It rose by $2,000
C. It rose by $600
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If a third-degree price-discriminating pure monopoly sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is ________.
A. relatively more elastic in market X than market Y B. the same in both market X and Y C. relatively less elastic in market Y than market X D. relatively less elastic in market X than market Y
One of the main tools economists use to analyze strategic behavior is
A) the Herfindahl-Hirschman Index. B) game theory. C) cartel theory. D) the collusion index. E) dual theory, which is used to study duopolies.
A speculator who believes strongly that interest rates will fall would be likely to
A) buy futures contracts on Treasury bills. B) sell futures contracts on Treasury bills. C) sell Treasury bonds in the spot market. D) decrease now the amount of money which he lends.
The business cycle that results from the election campaign of incumbent politicians is called a:
a. monetary business cycle. b. time consistent business cycle. c. political business cycle. d. real business cycle. e. historical business cycle.