Which of the following statements is false?
A) Purchasing power and the price level are inversely related.
B) The real balance effect refers to the change in the purchasing power of dollar-denominated assets as a result of a change in the price level.
C) The aggregate demand curve slopes downward because of the real balance, interest rate, and international trade effects.
D) A change in the quantity demanded of Real GDP is directly brought about by a change in interest rates.
D
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Based on the model, the firm’s M? function must be
Consider the following model for the production of refined oil: MSC = 10 + 0.5Q; MEC = 0.3Q; MSB = 30 – 0.3Q; MEB = 0. a. M? = 20 – 0.8Q c. M? = 0.3Q b. M? = 20 – 0.5Q d. M? = 20 – 0.1Q
Competition between banks
A) encourages greater risk taking. B) encourages conservative bank management. C) increases bank profitability. D) eliminates the need for government regulation.
For most residential telephone service, people pay a monthly fee to have a hookup to the telephone company's line plus a fee for each call actually made. Under this pricing scheme, the telephone company is using
A) limit pricing. B) a two-part tariff. C) second-degree price discrimination. D) two stage price discrimination.
If real GDP increases and the price index also increases: a. nominal GDP must also have risen
b. nominal GDP must have fallen. c. nominal GDP could have either risen or fallen. d. the percentage increase in nominal GDP must have been greater than the percentage increase in the price level.