Computers and software programs are:
a. inferior goods.
b. complementary goods.
c. goods with a cross-price elasticity of demand of 0.
d. substitute goods.
e. perfectly elastic goods.
b
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A variable that RBC theory is simply not interested in and seldom attempts to explain or predict is
A) employment. B) the real interest rate. C) the real wage rate. D) the price level.
The Russian wheat crop fails, driving up wheat prices in the U.S. This is an example of:
A. idiosyncratic risk. B. quantifiable risk. C. diversification. D. systematic risk.
If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will:
A. increase output and decrease price. B. reduce both output and price. C. reduce output and increase price. D. increase both output and price.
The stock market showed a PE for Alibaba equal to 32. What does PE mean?
A. perfect-earnings ratio B. price-earnings ratio C. profit-earnings ratio D. price-equity ratio