The present value of $1 received 1 year from now, given the current interest rate of 7%, is about
A. $.90.
B. $.91.
C. $.93.
D. $1.00.
C. $.93.
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The income effect of a higher real wage on the quantity of labor supply is the
A) idea that workers feel psychologically wealthier when wages are higher, so they work more. B) effect that income must rise when wages rise. C) tendency of workers to supply more labor in response to becoming wealthier. D) tendency of workers to supply less labor in response to becoming wealthier.
Which one of the following could cause a recessionary gap?
a. Interest rates are too low. b. Consumers spend more than they earn. c. Price levels are too high. d. Businesses spend more than they save.
Movements along a money demand curve reflect the effects of changes in the _____
Fill in the blank(s) with the appropriate word(s).
Economists believe that there are many nonmonetary gains from further trade opening. Which of the following is NOT one of those potential gains?
A) Economies of scale from increased production decreases costs. B) Intensified competition lowers prices. C) Governments will be less reliant on tariff revenue. D) Diversification of production lowers risks.