When the price level increases people:
A. feel less wealthy.
B. feel more wealthy.
C. experience a bubble forming in the economy overall.
D. have the same real value of assets, regardless of the change in the price level.
Answer: A
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Which of the following decreases the supply of restaurant meals?
A) Waiters get a pay raise. B) Consumers' incomes increase and restaurant meals are a normal good. C) Consumers' incomes decrease and restaurant meals are a normal good. D) The price of movies, a complement to restaurant meals, falls.
Why is the demand curve for new capital downward sloping?
What will be an ideal response?
Suppose a firm's technology is represented by the Cobb-Douglas production function F(L, K) = 5LK. The wage rate is $50 and the rental rate of capital is $10. What is the least-cost combination to produce 100 units of output?
What will be an ideal response?
Suppose the money supply is $8 trillion and nominal GDP is $14.2 trillion. What is the velocity of money?
A. 112 B. 8.0 C. 1.8 D. We cannot compute it without knowing real GDP.