If nominal interest rates increase:
A. the expected inflation rate must have gone up.
B. either the expected inflation rate went down, the real interest rate went down, or both.
C. either the expected inflation rate went up, the real interest rate went up, or both.
D. the real interest rate must have gone up.
Answer: C
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Wage inequality has been on the rise in virtually all high-income industrial economies since the 1970s. The causes are probably numerous, but the leading explanation for the greatest share of the increase in inequality is
A) the growth of trade with developing countries. B) the growth of trade with other high income industrial countries. C) technological change which increased the relative demand for skilled workers. D) technological change which increased the relative demand for unskilled workers. E) technological change which decreased the relative demand for skilled workers.
According to the "law" of demand, we would expect
a. the demand curve to be negatively sloped. b. the demand curve to be positively sloped. c. the total quantity demanded by the market to move in the same direction as price. d. marginal utility to increase as quantity demanded increases.
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.According to the figure, if MiiTunes charges low prices, The Rock Shop should:
A. enter the market and lose $2 million. B. enter the market and earn $4 million. C. not enter the market and earn $0. D. It cannot be determined what The Rock Shop will do.
Unlike the Kyoto Protocol, the Copenhagen Accord will:
a. include India and China as participants. b. strongly curtail emissions. c. seek to reverse global warming d. be noncontroversial.