A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?
a. the mayor
b. the city manager
c. The answer depends on the price elasticity of demand.
d. The answer depends on the costs of construction of the new municipal swimming pool.
c
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If a teacher tells a student that those who attend the study session typically score higher on the final exam,
A) the student has a positive incentive to attend the study session because she may get a higher grade. B) the student has a negative incentive to attend the study session because she will be punished if she does not go. C) the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam. D) a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.
When the money market is drawn with the value of money on the vertical axis, an increase in the money supply creates an excess
a. supply of money, causing people to spend more. b. supply of money, causing people to spend less. c. demand for money, causing people to spend more. d. demand for money, causing people to spend less.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.
If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the real interest rate turned out to be 5.1%, then the nominal interest rate equals
A. 1.4%. B. 6.5%. C. 2.6%. D. 1.5%.