One of the reasons fiscal and monetary policy can stimulate output and employment in the short run is that nominal wages increase faster than the price level
a. True
b. False
Indicate whether the statement is true or false
False
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As the amount of inventories maintained by a firm increases:
A) its elasticity of supply increases. B) its elasticity of supply decreases. C) the elasticity of demand for its product increases. D) the elasticity of demand for its product decreases.
Why might developing countries hesitate to accept the conclusion that countries should specialize according to their comparative advantage? What dynamic gains might offset their objections?
What will be an ideal response?
Explain why high priced lawyers may support an industry ban on price advertising for lawyers
What will be an ideal response?
When the inflation rate ends up being lower than expected,
a. everyone benefits because money is cheaper b. everyone benefits because prices do not increase c. lenders of fixed-rate mortgages generally benefit because they will make higher profits than they had calculated d. borrowers with fixed-rate loans will benefit because their purchasing power will not decline as much e. no one benefits because everyone made financial calculations based on the projected interest rate