The public often overestimates the negative effects of inflation due to a focus on nominal rates of interest
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose you are the manager of Natural Oils, a firm that specializes in healthy skin oils. To make your oils, you purchase avocado pits from guacamole manufacturers. If the demand for guacamole increases, this will cause the production of avocado pits to ________ and the price of avocado pits to ________.
A) increase; fall B) decrease; fall C) increase; rise D) decrease; rise
Which of the following is not a variable in the index of leading indicators?
A. average work week B. duration of unemployment C. employment claims D. new businesses
According to prospect theory, what strategy will firms typically employ with regard to pricing and packaging of their goods, when faced with rising production costs?
A. Firms will increase both package sizes and prices but will increase prices more to communicate to consumers that the product has greater value. B. Firms will reduce package sizes but keep prices the same, thus increasing the per unit price of the good. C. Firms will keep package sizes the same but lower prices and attempt to cover the higher costs with greater revenue. D. According to prospect theory, the choice of strategy doesn't matter, as consumers are generally able to recognize price increases regardless of what form they take.
When will the scale effect of a wage increase cause a fall in the amount of labor employed?
a. Always. b. When labor is not a regressive factor. c. When labor and capital are substitutes in production. d. When labor and capital are complements in production.