Ceteris paribus means
A. Holding everything constant except for the variables you are interested in examining.
B. Holding constant the determinant of demand or supply that you are interested in examining.
C. Changing prices to see how demand or supply shifts.
D. Allowing the free market to decide, not government.
Answer: A
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Which of the following is correct? In the 1990's
a. the Fed maintained low inflation because it had to follow a policy rule. b. the Fed maintained low inflation even without being required to follow a policy rule. c. the Fed was not required to follow a policy rule and let inflation move higher. d. the Fed was required to follow a policy rule, but it provided the Fed enough discretion that inflation moved higher.
The Time-for-a-Change wristwatch company holds a patent on holographic wristwatches. The company can earn a profit on the sale of holographic wristwatches
A. only in the long run because government regulations prevent monopolists from earning profits in the short run. B. in the long run but not the short run because the monopolist will face competition in the short run. C. in the long run because entry into the industry by new firms is blocked until the patent expires. D. in the short run but not in the long run because new firms will enter the industry in the long run.
The real cost of borrowing is unchanged when the ________ interest rate and the ________ rate increase by the same amount.
A. real; inflation B. real; nominal interest C. nominal; inflation D. nominal; real interest
Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have
A) an absolute and a comparative advantage in both products. B) an absolute but not a comparative advantage in both products. C) a comparative but not an absolute advantage in both products. D) neither a comparative nor an absolute advantage in both products.