Which of the following factors does not explain the inverse relationship between the price level and the total demand for output?
A. An interest-rate effect
B. A foreign-purchases effect
C. A real-balances effect
D. A substitution effect
Answer: D
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The default rate actually drops as the amount borrowed increases, that is, default rates are highest among those with the smallest student loan debts.
Answer the following statement true (T) or false (F)
When evaluating whether or not to make an investment, one should focus on the ________ because doing so takes into account anticipated inflation.
A. exchange rate B. real interest rate C. junk bond rate D. nominal interest rate
Refer to the information provided in Figure 28.4 below to answer the question(s) that follow.
Figure 28.4Refer to Figure 28.4. If the demand for labor falls from D to D' and wages are sticky on the downward side, there will be unemployment of ________ million.
A. 200 B. 150 C. 100 D. 50
Consider the change in the price of a book depicted in the above figure. The original budget line is BC. The new budget line is BD. As a result of this price change, the income effect can be represented by a movement from
A) point E to point F. B) point G to point A. C) point G to point F. D) point A to point F.