Which of the following is a macro consequence of a sudden increase in the average level of prices?
A. People lengthen their time horizons.
B. Nominal income falls by a smaller percentage than real income.
C. People on fixed incomes benefit.
D. Uncertainty is greater.
Answer: D
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What are the proximate causes of prosperity? How are they related to the fundamental causes of prosperity?
What will be an ideal response?
The monopsony will hire the amount of labor so that the
A) demand for labor equals supply for labor. B) value of marginal product of labor equals the wage rate. C) value of marginal product of labor equals the marginal cost of labor. D) supply for labor equals the wage rate.
If the production of paper causes economic damage to a community, allowing the market to set the price of paper equal to the private marginal cost of producing paper will
a. generate less than the optimal quantity of paper produced b. generate more than the optimal quantity of paper produced c. generate an equilibrium price that is higher than the price associated with the market's most efficient level of output d. cause some but not all paper producers to go out of business e. benefit society because of externalities generated by the production
The scientific method, on which economics relies, consists of several elements, including which of the following?