Using productive resources to make capital goods requires that we
A) get everyone to agree on the best use of those resources.
B) get government approval of our plan to make capital goods.
C) forgo some level of current consumption.
D) prove that the existence of the capital goods will not cause any environmental damage.
Answer: C
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You lend $5,000 to a friend for one year at a nominal interest rate of 10%. The CPI over that year rises from 180 to 190. What is the real rate of interest you will earn?
A) 0% B) 4.4% C) 5.5% D) 5.8%
In the equation of exchange, GDP divided by the money supply is equal to
A) M. B) V. C) P. D) Q.
When the price level increases, the purchasing power of money:
A. decreases. B. stays the same since the purchasing power of money is not impacted by price levels. C. increases by a similar amount. D. first increases and then decreases as people get used to higher prices.
Over the past 100 years, what has happened to the average workweek in the U.S. manufacturing industry? Why has this occurred? What are the implications for the size of the income and substitution effects?
What will be an ideal response?