Changes in what four variables will shift the long run aggregate supply curve?
Labor, capital, natural resources and technological knowledge
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Discuss the relationship between PPP and the Law of One Price
What will be an ideal response?
Because of their brand names, Kodak, IBM, Honda, Daimler-Chrysler, and other well-known firms are able to charge significantly higher prices for their products than their competitors without losing any business. Expenditures made by firms to create brand names:
a. are always inefficient. b. provide reliability to consumers. c. lead to monopolies. d. necessarily lead to deadweight losses. e. would not exist if information was less costly for firms to obtain than consumers.
In the classical model with an open economy, an increase in government purchases can affect a country's exchange rate, causing its imports and exports to change
a. True b. False
When the rate of interest is 10 percent, the present value of $100 payable in two years is approximately
A. $80. B. $110. C. $100. D. $83.