Nominal income:
A. Reflects the purchasing power of money.
B. Is income adjusted for inflation.
C. Is the amount of money income, measured in current dollars.
D. Is the amount of money income, measured in constant dollars.
C. Is the amount of money income, measured in current dollars.
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Explain the real-nominal principle
What will be an ideal response?
Which of the following is NOT considered an example of a capital good?
A) a miner's cap B) a GPS tracking device C) an airport kiosk D) a U.S. government bond E) a stethoscope
The quantity supplied of a good:
A) is inversely related to the price of the good. B) is determined irrespective of the market price. C) is always equal to the quantity demanded of the good. D) is the amount of the good that sellers are ready to supply at a given price.
An inflation-prone country
A) gains from vesting its monetary policy decisions with a "conservative" central bank. B) loses from vesting its monetary policy decisions with a "conservative" central bank. C) gains from vesting its fiscal policy decisions with a "conservative" central bank. D) loses from vesting its fiscal policy decisions with a "conservative" central bank. E) remains constant when vesting its fiscal policy decisions with a "conservative" central bank.