Which of the following is NOT a characteristic of a perfectly competitive long-run equilibrium?
A. Price equals long-run minimum average cost.
B. Firms are producing on the downward sloping portions of their short-run average cost curves.
C. Firms are earning zero profits.
D. Price equals marginal cost.
Answer: B
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If the CPI rises from 206.7 to 212.7 between two consecutive years, by how much has the cost of living changed between these two years?
A) The cost of living has increased by 6%. B) The cost of living has increased by 12.7%. C) The cost of living has decreased by 6%. D) The cost of living has increased by 2.9%.
If the real interest rate is -1.4% and the nominal interest rate is 0.6%, expected inflation equals
A) -2% B) -0.8% C) 0.8% D) 2%
An outward shift of the money demand function indicates an increase in the market rate of interest and hence a decrease in the level of investment in the economy
a. True b. False Indicate whether the statement is true or false
Assume Joe invests a total of $10,000 in a company - $5,000 of which is his own money and $5,000 which he borrowed at a 10% interest rate. If the company's stock value increases by 20% in one year at which time Joe sells his shares of the stock, what is Joe's rate of return on his investment?
a. 10% b. 15% c. 20% d. 30%