The trade-off between the present and future consumption is measured by
A) the money cost of both the present and future consumption.
B) the foregone present consumption.
C) the difference between the money price of future goods and the money cost of producing them.
D) the difference between the money price of present goods and the money cost of producing them.
B
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In 2011, apples cost $1.49 a pound. Suppose the CPI was 120 in 2011 and 140 in 2012. If there is no change in the real price of an apple in 2012, what is the price of a pound of apples in 2012?
A) $2.74 B) $1.69 C) $1.66 D) $1.74 E) $1.28
What is a reference point?
A) the value of a good on the black market B) the point from which an individual makes a consumption decision C) a subjective valuation of a good D) the minimum price that an individual would sell a good that she currently owns E) none of the above
If the demand for money is insensitive to the interest rate, then the most effective expansionary policy would be
A. fiscal policy. B. monetary policy. C. neither fiscal nor monetary policy. D. both fiscal and monetary policy.
The true cost of borrowing is the nominal interest rate
Indicate whether the statement is true or false