Suppose you borrow $500 from your bank to pay for a guitar. This is an example of
A) direct financing.
C) moral hazard.
B) indirect financing.
D) transaction costs.
Answer: B) indirect financing.
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How, other than by adjusting price, do firms in monopolistic competition compete?
What will be an ideal response?
A long line at the campus bookstore at the beginning of the term is an example of
A) price rationing. B) an ineffective price ceiling. C) a non-price rationing device. D) an ineffective price floor.
Given an upward sloping aggregate supply curve, which of the following changes in the aggregate demand curve is observed when the Fed reduces the money supply?
a. The aggregate demand curve shifts leftward, lowering real GDP and the price level b. The aggregate demand curve shifts leftward, raising real GDP and the price level. c. The aggregate demand curve shifts leftward, lowering real GDP but raising the price level. d. The aggregate demand curve shifts rightward, raising real GDP and the price level. e. The aggregate demand curve shifts rightward, lowering real GDP but raising the price level.
In year 1 the CPI is 180, and in year 2 the CPI is 192. From year 1 to year 2, Javier's salary rises from $40,000 to $42,000, and Tom's salary rises from $55,000 to $57,000. Who is "more than keeping up with inflation"?
A) Javier B) Tom C) both Tom and Javier D) neither Tom nor Javier