Other things being equal, if there is an increase in the price of the good measured on the vertical axis, the budget constraint will shift outward
a. True
b. False
Indicate whether the statement is true or false
False
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A chain-weighted index
A) calculates changes in prices by using an average of base years from neighboring years to obtain a more accurate measure of real GDP growth. B) is used to understate the rate of inflation. C) is a useful tool for determining which fence to purchase. D) uses neighboring years' data to calculate changes in nominal GDP.
Since Germany is a large open economy, the increase in German borrowing and investment in what was formerly East Germany in the early 1990s resulted in
A) a decline in the world real interest rate. B) a shift to the right in the German supply of loanable funds curve. C) an increase in the real interest rate in the United States. D) a shift to the left in the German demand for loanable funds curve.
In the market for used cars, if buyers and sellers have perfect information about the quality of cars, then
A) all cars will sell for the same price and there is no asymmetric information problem. B) all cars will sell for the same price and there is an asymmetric information problem. C) cars sell for their true value and there is no asymmetric information problem. D) all cars will sell for the same price and there is a moral hazard problem.
Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will
a. increase. b. decrease. c. not change. d. It is not possible to determine what will happen to the equilibrium rental price of capital equipment.