The distinction between real and nominal shocks is that
A. real shocks directly affect only the FE line, but not the LM curve.
B. real shocks have a large direct effect on the IS curve and the FE line, but only a small direct effect on the LM curve.
C. real shocks directly affect only the IS curve, but not the FE line or LM curve.
D. real shocks directly affect only the IS curve or the FE line, but not the LM curve.
Answer: D
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If individuals are rational, they should choose actions that yield the:
A. smallest economic surplus. B. largest economic surplus. C. smallest total costs. D. largest total benefits.
Natural resources include both plants and animals
Indicate whether the statement is true or false
Pick the economic variable that is countercyclical
a. Wages b. Investment c. Government transfer payments d. Nominal interest rates e. All of the above are countercyclical variables
Jane pays the market price of $69 for a new pair of running shoes, even though she would be happy to pay a maximum of $100 for the same pair of shoes. This is an example of the concept of
A. price ceilings. B. producer surplus. C. consumer surplus. D. full economic prices.