The lower the interest rate:
A. the greater the level of inflation.
B. the smaller the present value of a future amount.
C. the greater the present value of a future amount.
D. None of the statements associated with this question are correct.
Answer: C
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Which of the following determines whether a firm will earn higher revenues when it raises its price?
A. The price elasticity of demand. B. Government regulation of the industry. C. The cost of the firm's inputs. D. None of the above, because companies always earn higher revenues when they increase price.
A surplus is said to exist when, at prevailing prices,
A) demand is greater than supply. B) quantity supplied is greater than quantity demanded. C) scarcity is eliminated. D) supply and demand are in harmonic equilibrium.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
Products such as office supplies are examples of
A) experience goods. B) simple goods. C) search goods. D) selective goods.