Which of the following would be an example of a flow variable?
a. The amount of money needed to buy a car
b. The amount of money a person has in her or her wallet
c. The amount of income a person earns each week
d. The amount of money a person has in a savings account
e. None of these are flow variables
C
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If both the production of goods and services increase and prices rise, then the change in nominal GDP
A) definitely understates the change in production. B) definitely accurately reflect the change in production. C) definitely overstates the change in production. D) either understates or might accurately reflect the change in production. E) More information is needed to determine how the change in nominal GDP compares to the change in production.
Exhibit 10-2 A monopolistic competitive firm
If all firms in a monopolistic competitive industry have demand and cost curves like those shown in Exhibit 10-2, we would expect that in the long run:
A. all firms will leave the industry. B. some firms will leave the industry. C. firms in the industry earn zero economic profits. D. a number of new firms will enter the industry.
A price taker is a buyer or a seller who:
A. takes the market price as given. B. buys or sells only at a price where profits can be made. C. accepts whatever price that the government legislates as the price of the good or service. D. has the ability to influence the equilibrium price in the market.
If the combination r = 6% and Y = $500 billion is on the LM curve, we know that the combination r = 4% and Y = $500 billion would represent
A. a movement up the Fed rule. B. the Fed rule shifting to the right. C. the Fed rule shifting to the left. D. a movement down the Fed rule.