An individual holds $1,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect
A. the individual's real wealth to decrease and consumption to decline.
B. no change in the individual's real wealth but a decline in real national product.
C. the individual's stock of real wealth to decrease but real national income to increase.
D. the individual's wealth to increase.
Answer: A
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Implicit costs are:
a. the opportunity costs of using resources owned by the entrepreneur in his/her own business. b. payments the business owner must make on borrowed funds. c. costs which vary as the level of output varies. d. those payments the business owner makes in cash. e. the payments the business owner makes for public relations, such as donations to charity.
Which economist developed the concept of the invisible hand?
a. John Maynard Keynes b. Adam Smith c. Karl Marx d. Milton Friedman
The existence of an inflationary gap would tend to benefit most
a. bankers. b. retired persons. c. unemployed workers. d. stock owners.
Explain the expression “time is more valuable than money.” Explain in words and use a diagram to illustrate the implications of this for a person’s labor supply curve.
What will be an ideal response?