The separation of real and nominal variables is referred to as the classical
a) determinant.
b) diseconomy.
c) discount.
d) dichotomy.
Ans: d) dichotomy.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
One baseline assumption that economists make about consumer behavior is that:
A. people are rational utility maximizers. B. people will always choose short-term benefits to longer-term payoffs. C. people will always choose what makes them happiest. D. people are unpredictable.
Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? a. Iceland has an absolute advantage, but not a comparative advantage in producing food. b. Iceland has a comparative advantage, but not an absolute advantage in producing food. c
Lavaland has both a comparative and absolute advantage in producing clothing. d. Lavaland has a comparative advantage, but not an absolute advantage in producing clothing.
The term ceteris paribus means
A) the greatest good for all. B) the study of scarcity and choice. C) all other things remaining constant or equal. D) value-free and testable.