What is the real-balance effect of an increase in the price level?
What will be an ideal response?
The real-balance effect is the change in the real value of the money balances when the price level changes, all other things constant. An increase in the price level means that the purchasing power of money balances is reduced.
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Use the following table to answer the question below. Jake's Production Possibilities ScheduleJane's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn01600801012020602080404030406020400800Jane should specialize in the production of which good?
A. corn B. green beans C. both D. neither
How has U.S. real GDP per person changed over the last 100 years?
What will be an ideal response?
It may be argued that Japan's explicit promotion of its microchip industry was an excellent example of successful industrial policy
What criteria would you apply to determine whether such a policy is or is not successful? Judging from your own stated criteria, was Japan's exercise successful? Why or why not? What information would a government require in order to increase the probability that its industrial policy would promote long term self-generated economic growth?
Which of the following is when an investment bank purchases securities outright in case it misjudged the state of the market and it may have to sell the securities at a lower price than what was guaranteed?
A) credit risk B) liquidity risk C) principal risk D) default risk