Which of the following is a correct reason for stating that the United States has a fiduciary monetary system?
I. Our money is convertible to a fixed amount of silver or gold.
II. Our money has a predictable value.
A) I only B) II only C) Both I and II D) Neither I nor II
B
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In the above figure, what is the marginal social cost to the economy of producing the four-hundredth pretzel?
A) $0 B) $2.00 C) $4.00 D) None of the above answers are correct.
The standard of living rises at a slower pace than labor productivity if
A) n = q. B) n < q. C) n > q. D) The standard of living is not affected by the relative size of n and q.
For an imaginary economy, when the real interest rate is 5 percent, the quantity of loanable funds demanded is $1,000 and the quantity of loanable funds supplied is $1,000 . Currently, the nominal interest rate is 9 percent and the inflation rate is 2 percent. Currently,
a. the market for loanable funds is in equilibrium. b. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will rise. c. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will fall. d. the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, and as a result the real interest rate will rise.
Suppose the economy starts off producing Natural Real GDP. Next, aggregate demand rises, ceteris paribus. As a result, the price level rises in the short run. In the long run, when the economy has moved back to producing Natural Real GDP, the price level will be
A) higher than it was in short-run equilibrium. B) lower than it was in short-run equilibrium but higher than it was originally (before aggregate demand increased). C) lower than it was originally (before aggregate demand increased). D) equal to what it was originally (before aggregate demand increased).