If the inflation rate exceeds the nominal rate of interest:
a. the real interest rate is negative.
b. All of the answers are correct.
c. lenders lose.
d. savers lose.
b
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The Monetarist model expands the Keynesian model by proposing that
A) decreases in the quantity of money lead to higher interest rates. B) the government should lower taxes promote economic growth. C) decreases in tax rates generate higher consumption. D) decreases in the growth rate of the quantity of money trigger expansions by controlling inflation. E) markets should be left alone to determine the optimal outcome.
The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The government would raise more tax revenue from this excise tax if
A) the demand was more inelastic. B) it places a price ceiling on blouses in addition to the tax. C) it places a price floor on blouses in addition to the tax. D) all of the above.
Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions
A) the income effect; the substitution effect B) Giffen goods; luxury goods C) network externalities; the endowment effect D) the ultimatum game; the dictator game
Knowledge has become measurably more important in today's economy
Indicate whether the statement is true or false