In which case would people desire to borrow the most?
a. the nominal interest rate is 8% and the inflation rate is 7%
b. the nominal interest rate is 7% and the inflation rate is 5%
c. the nominal interest rate is 6% and the inflation rate is 3%
d. the nominal interest rate is 5% and the inflation rate is 1%
a
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A profit-maximizing monopolistically competitive firm produces and sells an allocatively efficient quantity of output
Indicate whether the statement is true or false
A variable which is independent of the level of income is
A) endogenous. B) exogenous. C) autonomous. D) irrelevant to any theory of income determination.
Diversification
A) puts the law of large numbers to work for you. B) eliminates the risk of investing in the stock market. C) generally leads to lower rates of return than an average stock picker could earn from equity investments. D) indicates that you should invest in the company for which you work and in whom you trust.
In Figure 5.6, what profit would the monopolist earn? In the figure below, a monopolist would charge which price? 
A. a loss equal to its total fixed cost. B. zero profit. C. a loss greater than its total fixed cost. D. a positive profit.