In the classical model, we assume there is no ongoing inflation, so there is no need to distinguish between the nominal interest rate and the real interest rate
a. True
b. False
A
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If the short run elasticity of demand for widgets is 0.4 and the long run elasticity of demand for widgets is 0.95, a decrease in price will ____ total revenue in the short run and ____ total revenue in the long run. a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease; decrease.
Which of the following items is an example of a good that is nonrival but excludable?
A. National defense B. Broadcast television C. Pay-per-view movies D. Corn
The best definition of GDP is
A. A physical measure of the capital stock of the economy. B. A dollar measure of final output produced during a given time period within a nation's borders. C. A measure of the per capita economic growth rate of the economy. D. The sum of the physical amounts of goods and services in the economy.
Using Figure 7.4, expected inflation was
A. The same in 1970 and 1995. B. Greater in 1970 than in 1995. C. Greater during the period from 1970 to 1975 than it was during the period from 1980 to 1985. D. Greater during the period from 1980 to 1985 than it was during the period from 1970 to 1975.