If borrowers and lenders expect a higher rate of inflation,
a. nominal interest rates should decrease.
b. nominal interest rates should remain constant.
c. nominal interest rates should increase.
d. real interest rates should increase.
c
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The United Auto Workers union is largely responsible for the historically high pay of American auto workers by negotiating pay raises above those obtained by workers in other industries. In addition to increasing the pay of auto workers, what other long-run effect would this high pay have on the use of auto workers?
What will be an ideal response?
Applying the analysis from the California test scores to another U.S. state is an example of looking for
A) simultaneous causality bias. B) external validity. C) sample selection bias. D) internal validity.
Which of the following would tend to increase the value of officially measured GDP?
a. decriminalization of drugs such as marijuana and cocaine b. decriminalization of prostitution c. decriminalization of gambling on basketball and football d. all of the above
Briefly explain the nature of a perfectly competitive firm. Briefly discuss the effect of new entrants into a perfectly competitive market