Wage and price stickiness
A. give rise to a vertical long-run aggregate supply curve.
B. give rise to a vertical short-run aggregate supply curve.
C. creates a surplus or a shortage of real GDP.
D. prevents the economy from producing its potential level of real GDP.
Ans: D. prevents the economy from producing its potential level of real GDP.
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If the nominal interest rate is 10 percent, the inflation rate is 6 percent, and the tax rate on interest income is 25 percent, what is the after-tax real interest rate?
A) 1.5 percent B) 4.0 percent C) 3.0 percent D) 6.0 percent E) 3.5 percent
An example of a bilateral monopoly would be when a union
A) bargains with many different employers. B) deals directly with the final consumers. C) bargains with a monopoly. D) bargains with a monopsony.
In the long run, which of the following is true?
A. Profit effects are larger than cost effects. B. Cost effects offset price effects. C. Cost effects are larger than profit effects. D. None of the choices are correct.
Fiat monies, but not commodity monies, can be used as a store of value.
Answer the following statement true (T) or false (F)