Which formula below best expresses the real interest rate, (r)?
A. i = r - ?e
B. r = i - ?e
C. r = i + ?e
D. ?e = i + r
Answer: B
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A decrease in wage rates in the United States will:
A. Decrease total wage income if labor demand is elastic B. Increase total wage income if labor demand is inelastic C. Increase total wage income if labor demand is elastic D. Decrease total wage income regardless of the elasticity of labor demand
The main examples of macroeconomic coordination failures are
A. profit declines. B. relative price changes. C. recessions and depressions. D. consumer taste changes.
In the circular flow model with the government sector, taxes
A) on households flow in the same direction as do the goods and services. B) on firms flow in the same direction as do factors of production. C) flow in the same direction as do transfers. D) flow from the goods market to the factor markets. E) flow in the opposite direction as do transfers.
A sudden massive reduction in the availability of chocolate will likely cause the price of chocolate to ________, which will ________ the quantity of chocolate demanded by consumers
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease