Which is not true of the interest rate?
A. It is the price at which funds can be rented.
B. It is the price at which funds can be borrowed.
C. It affects the marginal revenue product of capital.
D. It does not affect the marginal revenue product of capital.
Answer: C
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Since 1950, there has been a substantial increase in wheat production. The increase in production has led to a decrease in the price of wheat because of which of the following factors?
A) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is greater than 1. B) The absolute value of the price elasticity of demand for wheat is greater than 1 and wheat is a close substitute for other food products. C) The income elasticity of demand for wheat is high and wheat is an inferior good. D) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is low.
In the Ricardian model, wages are equal across industries because:
a. employers care for their workers. b. workers prefer to work in exporting industries. c. workers are freely mobile between industries. d. workers are freely mobile between countries.
Which of the following is the most likely explanation for inflation in the United States?
A. increases in aggregate supply B. increases in aggregate demand C. decreases in aggregate supply D. decreases in aggregate demand
A mortgage loan that would allow a borrower to repay none of the principal of the debt over the first few (typically five or ten) years of the mortgage could be called
A. a "zero-down" mortgage. B. a "zero-interest" mortgage. C. an "interest-only" mortgage. D. all of the options are correct.