Nominal interest rates are considered to be ___ in the short-run model.
a. flexible
b. rigid
c. zero
d. set by the central bank
Ans: a. flexible
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Harry's HVAC refuses to sell diagnostic software and spare parts of its heating and cooling systems to third parties. Why would it want to do that?
a. To ensure that the customer knows that they are stuck with Harry's service technicians b. To ensure that only the highest paid personnel get to service the units c. To ensure that the customers do not buy second-class servicing and then infer faulty design if a unit breaks down due to inadequate service d. All of the above
If two goods are often consumed together, they are
a. substitute goods b. inferior goods c. complementary goods d. normal goods e. unrelated goods
The measurement of income distribution that splits income earned among the various factors of production (inputs) is called the
A. family distribution of income. B. personal distribution of income. C. functional distribution of income.
Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply:
a. decreases $500,000. b. increases $500,000. c. increases $600,000. d. increases $100,000.