In general, changes in the price level will change the:
A. real value of people's wealth and income.
B. nominal value of cash balances.
C. real value of consumption goods only.
D. nominal value of consumption goods and the real value of durable goods.
A. real value of people's wealth and income.
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A firm invests in a new machine that costs $2,000 a year but is expected to produce an increase in total revenue of $2,200 a year. The current real rate of interest is 8%. The firm should
A. undertake the investment, because the expected rate of return of 9% is greater than the real rate of interest. B. not undertake the investment, because the expected rate of return of 7% is less than the real rate of interest. C. undertake the investment, because the expected rate of return of 12% is greater than the real rate of interest. D. undertake the investment, because the expected rate of return of 10% is greater than the real rate of interest.
If the wage rate is ________ the value of marginal product, a firm can increase its profit by ________
A) greater than; selling an extra unit of output B) less than; selling one less unit of output C) less than; hiring an extra worker D) less than; hiring one less worker
List the four components of GDP
In the "classical" region of the aggregate supply curve,
A. the economy is at the maximum output level, so only the composition of output can be changed, the quantity of output cannot be increased. B. the economy is on the production possibilities frontier. C. attempts to expand output will result in increases in both prices and output. D. the economy is at the maximum output level, so only the composition of output can be changed, the quantity of output cannot be increased AND the economy is on the production possibilities frontier.