If real income rises from $5 trillion to $5.3 trillion while the price level increases by 10 percent, it follows that nominal income:
A. rises by 6 percent.
B. rises by 16 percent.
C. rises by 10 percent.
D. doesn't change.
Answer: B
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The circular flow is used to make the point that
A) unemployment only occurs during a recession. B) production generates income. C) rising prices never occur during times of unemployment. D) households purchase factors of production from firms.
Everything else held constant, if aggregate output is to the left of the LM curve, then there is an excess ________ of money which will cause the interest rate to ________
A) supply; fall B) supply; rise C) demand; fall D) demand; rise
Which of the following is not a typical solution to the "Tragedy of the Commons?"
a. taxing the use of the common resource b. turning the common resource into a club good c. turning the common resource into a private good d. regulating the use of the common resource
If the long-run supply curve of a purely competitive industry slopes upward, this implies that the prices of relevant resources:
A. will fall as the industry expands. B. are constant as the industry expands. C. rise as the industry contracts. D. rise as the industry expands.