The neutrality of money is the idea that:
A. aggregate price levels do not affect real outcomes in the economy.
B. hard money has a neutral effect in the economy.
C. in real terms, it makes no difference who is spending each dollar.
D. virtual money has a neutral effect in the economy.
A. aggregate price levels do not affect real outcomes in the economy.
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Suppose you hit a progressive jackpot on a slot machine in a casino in Atlantic City and are given the choice of the following prizes:
Prize 1: $150,000 to be received right away, with three additional payments of $150,000 to be received each year for the next three years. Prize 2: $500,000 to be received right away. If the interest rate is 5 percent, what is the present value of each prize?
If 10 units of a good are sold at a market price of $40 each, then
a. the value to some individual of the tenth unit of output is $40 b. the economy is efficient c. selling an 11th unit would be a Pareto improvement d. a side payment of $40 is needed to ensure that the good is produced e. the market must be perfectly competitive
Alternating periods of growth and contraction in real GDP define:
A. The business cycle. B. Capitalism. C. Inflation. D. Macro equilibrium.
Which of the following is NOT true of a perfectly competitive firm?
A. It sells only a small fraction of the total quantity exchanged in the market. B. It seeks to maximize revenue. C. It faces a perfectly elastic demand curve. D. It is unable to influence the price of the good it sells.