For both parties to gain from trade, the price at which they trade must lie exactly in the middle of the two opportunity costs
a. True
b. False
Indicate whether the statement is true or false
False
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During the financial crisis in 2007 and 2008, financial institutions believed that default risks were higher. As a result, there was ________ in the supply of loanable funds and a ________ in the real interest rate
A) a decrease; fall B) an increase; rise C) an increase; fall D) a decrease; rise
The difference between the ________ and the ________ from the sale of a product is called producer surplus
A) highest price a firm would have been willing to accept; lowest price it was willing to accept B) cost to produce a product; profit received C) lowest price a firm would have been willing to accept; price it actually receives D) cost to produce a product; price a firm actually receives
Which of the following is a true statement?
A. Under normal conditions, there is a short-run trade-off between inflation and unemployment. B. There is a long-run trade-off between inflation and unemployment. C. The short-run Phillips Curve is vertical. D. The long-run Phillips Curve is horizontal.
If the rate of exchange for a pound is $4, the rate of exchange for the dollar is:
A. ΒΌ pound. B. 4 pounds. C. $.25. D. $1.00.