If the nominal interest rate is higher than the inflation rate, the value of your savings:
A. will increase.
B. will decrease.
C. should remain about the same.
D. cannot be assessed without knowing the beginning balance of savings.
A. will increase.
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Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market. The marginal cost is $3 per pound, the average variable cost is $2 per pound, and the beans sell for $4 per pound. Jerry
A) is maximizing profit. B) is incurring an economic loss and should shut down. C) could increase his profit by producing more beans. D) could increase his profit by producing fewer beans. E) could increase his profit by raising the price of his beans.
Which of the following is NOT a determinant of household saving?
A) the nominal interest rate B) disposable income C) the household's wealth D) expected future income
Microeconomics studies
A) decisions made by individual consumers and firms. B) the changes in economic theory brought about by real-world events. C) how small changes in the unemployment rate can have far-reaching effects. D) how small changes in the money supply can have far-reaching effects.
The theory of purchasing power parity assumes:
A. the real exchange rate is fixed but the nominal exchange rate is flexible. B. the real exchange and nominal exchange rates are fixed. C. the nominal exchange rate is fixed but the real exchange rate is flexible. D. the real exchange rate varies with the inflation differential.