When a payment is indexed to inflation and the price index understates inflation,
a. the real payment decreases over time
b. the real payment increases over time
c. the nominal payment decreases over time
d. in unemployment rate will increase
e. the level of unemployment will increase
A
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Which of the following businesses could easily exit a market?
a. a diamond mine b. a hot dog restaurant c. an oil refinery d. a breakfast cereal company
What is the rationale for government provision of education?
a. Not all incomes are equal, but everyone has the right to education regardless of wealth. b. Potential students consider only their personal benefits gained from education, but the rest of society benefits, too. c. No education would be provided in the absence of government provision because everyone would consume it without paying. d. The cost of providing education for the entire public is too large. e. The government can provide education at a much lower cost than the private sector.
Any change in the volume of export or import by a small country will have no effect on its terms of trade.
Answer the following statement true (T) or false (F)
If a bond sells for $1,000 and pays $50 per year in interest, the interest rate on the bond is
A. 50 percent. B. 20 percent. C. 2 percent. D. 5 percent.