Suppose your bank pays you 5 percent interest per year on your savings account. If prices increase by 5 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?
A. $0
B. $1
C. $3
D. $6
Answer: A
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Assume foreign beer is a normal good. If the incomes of demanders increase,
A) demand for foreign beer will increase. B) the quantity supplied of foreign beer will increase. C) the price of foreign beer will increase. D) all of the above will occur. E) none of the above will occur.
"I really enjoy watching movies. The first one is best. After that I still enjoy movies but the last one is not as much fun to watch as the one before it." This statement reflects the
A) principle of diminishing total utility. B) principle of diminishing marginal utility. C) principle of increasing marginal utility. D) law of supply.
In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. A recessionary gap exists
A) if the long-run aggregate supply curve is LAS1. B) if the long-run aggregate supply curve is LAS2. C) if the long-run aggregate supply curve is LAS3. D) All of the above answers are correct.
What matters most to importers and exporters is the nominal exchange rate
Indicate whether the statement is true or false