When economists speak of changes in GDP measured in constant dollars, they mean that
a. money GDP is constant.
b. the price level is constant.
c. a price index has been used to adjust money GDP for the effects of inflation.
d. the growth rate of money GDP has been adjusted for changes in population.
C
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The aggregate supply curve is drawn with
a. the price level on the vertical axis and nominal GDP on the horizontal. b. nominal GDP on the vertical axis and real GDP on the horizontal. c. the price level on the vertical axis and real GDP on the horizontal. d. real GDP on the horizontal and the rate of inflation on the vertical.
Monetary policy involves altering the quantity of money and thus affecting the level of interest rates and the extent of borrowing in an economy
a. True b. False Indicate whether the statement is true or false
Robin owns a horse stables and riding academy and gives riding lessons for children at "pony camp.". Her business operates in a competitive industry. Robin gives riding lessons to 20 children per month. Her monthly total revenue is $4,000 . The marginal cost of pony camp is $250 per child. In order to maximize profits, Robin should
a. give riding lessons to more than 20 children per month. b. give riding lessons to fewer than 20 children per month. c. continue to give riding lessons to 20 children per month. d. We do not have enough information to answer the question.
Theoretically, profit maximization occurs at P* and q* in the short run. However, empirical work suggests that oligopolists often actually charge P 1 . Which deterrence strategy best incorporates this action?
a. The oligopolist maintains P* until the threat of entry subsides, then lowers the price to
P 1 .
b. The oligopolist maintains P1 until the threat of entry subsides, then keeps the price at
P 1 .
c. After the threat of entry subsides, the oligopolist lowers the price below P 1 .
d. After the threat of entry subsides, the oligopolist raises the price to the profit-
maximizing price.