When the ________ interest rate is low, there are greater incentives to ________ and fewer incentives to ________
A) nominal; lend; borrow
B) real; lend; borrow
C) real; borrow; lend
D) market; lend; borrow
C
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An asset is liquid if it
A) is of intrinsic value. B) can be exchanged for other goods and services. C) is a store of value. D) can be obtained or disposed of without losing much of its nominal value.
The average percentage markup in the economy
a. is of special interest in microeconomics b. fluctuates greatly from year to year c. depends on competitive conditions in the economy d. depends on the level of GDP e. increases as the interest rate increases
Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
A. shift into producing good Y. B. anticipate a price increase for good X. C. intensify its production of good X. D. charge a higher price for good X.
What is the difference between willingness to accept and willingness to pay? For a trade to take place, does the willingness to accept have to be lower, higher, or equal to the willingness to pay?
What will be an ideal response?