A sustained decrease in the price level is known as deflation
a. True
b. False
Indicate whether the statement is true or false
True
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It is frequently observed that when a city is located next to a major highway, gas stations located close to the highway charge higher prices than gas stations located farther away. This is an example of:
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) illegal price discrimination.
Banks require collateral for loans in order to
A) ensure that borrowers have significant amounts of their own funds invested in their businesses. B) charge higher interest rates on loans. C) reduce their tax liability on the interest they collect on loans. D) reduce the total amount they are obliged to lend to any one borrower.
Which of the following statements best describes the study of economics?
A. Economics studies how people maximize returns in the stock market. B. Economics studies how the Federal Reserve handles fluctuation in business cycles. C. Economics studies how governments determine appropriate tax rates. D. Economics studies how individuals and groups manage scarce resources.
Causality is clear and mechanical with the quantity theory of money. If M increases because:
A. V and Q are variable, the price level, P, increases. B. V and Q are variable, the price level, P, decreases. C. V and Q are constant, the price level, P, increases. D. V and Q are constant, the price level, P, decreases.