A rise in the overall price level means that:
A. a given number of dollars won't buy as much real goods and services.
B. dollar-denominated assets have lost their value.
C. the cost of living has gone down.
D. None of these is true.
A. a given number of dollars won't buy as much real goods and services.
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Which of the following theories of expectations holds that individuals form expectations by looking only to past values of the variable to be forecast?
A. Rational expectations theory B. Certainty equivalent theory C. Expected value analysis D. Adaptive expectations theory
Suppose several United States software design companies compete with each other in a perfectly competitive environment. If one company decides to move some of its offices to a low-wage country in order to reduce operating costs, then:
A. the company that moves to the low-wage country will earn a positive economic profit in the long run. B. the company that moves to the low-wage country will soon return to the United States. C. the other companies will still be able to remain profitable while operating solely in the United States. D. other companies will have an incentive move to the low-wage country in order to remain competitive.
The largest portion of any nation's current account is typically
A. gold sales. B. imports and exports. C. foreign currency reserves. D. the sale of U.S. assets.
If your broker tells you that a trust to which you are a beneficiary has changed, and instead of getting $5000 per year starting next year, you will be getting $4000 per year starting next year, the present value to you has
A. risen. B. remained unchanged. C. necessarily become more predictable. D. fallen.