The LM curve illustrates that when income increases, the
A. real interest rate on nonmonetary assets must increase to clear the goods market.
B. price level must increase to clear the goods market.
C. real interest rate on nonmonetary assets must increase to clear the asset market.
D. price level must increase to clear the asset market.
Answer: C
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Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP. Do you agree or disagree? Why?
What will be an ideal response?
Suppose the official gold value of the Brazilian real changes from 527 reals per ounce to 508 reals per ounce. We can then say that:
a. the Brazilian real has depreciated in value as a consequence of free market fluctuations. b. the Brazilian real has appreciated in value. c. gold is now more expensive to purchase in Brazil than it was before. d. the Brazilian real has been devalued. e. the Brazilian economy is expected to experience rapid inflation.
A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are efficiently utilized. An economy that operates inside this production possibilities curve
a. is using its resources inefficiently. b. lacks the necessary technology to produce efficiently. c. lacks the resources to produce goods efficiently. d. is utilizing its available resources as efficiently as possible.
Which of the following is not a type of economic analysis?
a. None of these choices is a type of economic analysis. b. Normative c. Resources d. Positive