An economy produces two goods, x and y. A year ago the price of x was $4 and the price of y was $6 . Today the price of x is $8 and the price of y is $10 . What happened to the nominal and the real value of good x? What happened to the nominal and real value of good y?
Both the nominal and real value of good x rose.
The nominal value of good y rose but its real value fell.
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A town wants to build a new bridge. Construction firms will submit sealed bids
The town will award the contract to the firm that submits the lowest bid and will pay the firm the amount of the second lowest bid (that is, the town will conduct a second-price procurement auction). So, for example, if Firm A bids $8 million, Firm B bids $9 million, and Firm C bids $10 million then the city will award the contract to Firm A (it submitted the lowest bid) and pay Firm A $9 million (the amount of the second lowest bid). Suppose your firm is willing to build the bridge for a minimum of $9 million. a. Show that bidding $9 million is a better strategy than bidding some amount below $9 million— say, $7 million. b. Show that bidding $9 million is a better strategy than bidding some amount above $9 million—say, $11 million.
"Our knowledge of the factors which govern the yield of an investment some years hence is usually very slight and often negligible." This quote by ________ helps to explain ________
A) Jorgenson; cycles of overbuilding B) Keynes; cycles of overbuilding C) Jorgenson; the accelerator hypothesis D) Keynes; the accelerator hypothesis
Market clearing in the loanable funds market
a. violates Say's Law b. guarantees that total spending will be just sufficient to purchase whatever output is produced c. means that the interest rate never changes d. guarantees that total spending will equal the quantity of loanable funds demanded e. requires that the government run a budget deficit
If production of a good creates external benefits, a competitive market will likely produce
a. less output than would maximize profit. b. more output than would maximize profit. c. less output than is efficient. d. more output than is efficient.