Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Mia's opportunity cost of producing one hair pin is
A) 1/3 of a bandana. B) 2.5 bandanas. C) 3 bandanas. D) 10 bandanas.
A
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In Taylor Rule equation, high value of parameter b indicates that
A) Fed cares more about avoiding recessions and high unemployment than about avoiding inflation. B) Fed cares more about avoiding inflation than about avoiding recessions and high unemployment. C) Fed cares more about avoiding recessions than about avoiding high unemployment. D) Fed cares more about avoiding high unemployment than about avoiding recessions.
If the nominal GDP of a country increases by 25 percent in 5 years but real GDP remains more or less stable, it implies that the growth in nominal GDP was due to an increase in _____
a. total fiscal spending b. the rate of investment c. the amount of exports d. the rate of inflation
Mrs. Brown decides to keep $7,000 in her checking account in anticipation of rising interest rates. This is an example of the
A. speculative motive for holding money. B. precautionary motive for holding money. C. commodity demand for money. D. transaction demand for money.
If an individual's income rises 4 percent and his clothing purchases increase 5 percent in response, the income elasticity for clothing by the individual is
A) -0.8. B) 0.8. C) 1.25. D) -1.25.