The difference between an absolute price and a relative price is that:
a. absolute prices are based on costs of production, relative prices are based on market exchange.
b. absolute prices are in terms of currency, relative prices are in terms of another good.
c. absolute prices are in terms of another good, relative prices are in terms of currency.
d. absolute prices never change, relative prices change with inflation.
b. absolute prices are in terms of currency, relative prices are in terms of another good.
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Economics studies the logic of choices made from among available possibilities.
Answer the following statement true (T) or false (F)
During a recession, output declines result in
A) lower unemployment in the economy. B) higher unemployment in the economy. C) no impact on the unemployment in the economy. D) higher wages for the workers.
The easiest way to have a monopoly today is
A. with a strong business plan. B. to have the government protect you. C. to be in a socialistic country. D. to own everything in your market.