The nominal interest rate and the real interest rate would be identical with low inflation
Indicate whether the statement is true or false
false
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A price increase will cause an increase in total revenue when:
A. the price effect outweighs the quantity effect. B. demand is perfectly elastic. C. demand is unit elastic. D. the quantity effect outweighs the price effect.
Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. Suppose the demand for milk doubles. What is the new long-run equilibrium price?
A. $20 per unit B. $40 per unit C. $24 per unit D. $2 per unit
ABC Co sells newly issued bonds. JLG Co sells newly issued stocks. Which company is raising funds in financial markets?
a. only ABC b. only JLG c. both ABC and JLG d. neither ABC nor JLG
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.