Which of the following statements is TRUE if your money income stays the same but the price of one good that you are buying goes up?
A. You will have to reduce the quantities you purchase of all goods.
B. Your nominal income has been decreased.
C. Your real income has increased.
D. Your effective purchasing power falls.
Answer: D
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Which of the following is a depository institution?
A) a life insurance company B) a credit union C) a pension fund D) a mutual fund
When a U.S. importer needs $22,000 to settle an invoice for 25,520 Swiss francs, the exchange rate must be:
a. 1 Swiss franc = $1.16. b. 1 Swiss franc = $0.16. c. 1 Swiss franc = $0.84. d. $1 = 1.16 Swiss franc. e. $1 = 1.84 Swiss franc.
When prices of products are set below equilibrium,
a. society's resources are inefficiently allocated. b. firms expand output to increase profits. c. firms earn excessively high profits. d. consumers benefit from surpluses of cheap goods.
Critics of the huge net returns on, for example, oil production will claim that the returns are
A. interest on the capital investment. B. rents on a natural resource. C. profits on entrepreneurial activity. D. exorbitant and should be taxed away.