When the public perceives that a monetary expansion will be temporary, what happens to nominal interest rates in the short run?
a. They will rise.
b. They will overshoot their target.
c. They will fall.
d. They will be unchanged.
Ans: c. They will fall.
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According to Joseph Schumpeter, which of the factors of production is central to economic growth?
A) natural resources B) land C) labor D) the entrepreneur
Many economies have seemed to get by even in the face of inflation rates in the thousands. How would you nevertheless explain the fundamental harm done by high inflation?
What will be an ideal response?
If the money market is in the liquidity trap, then people
A) do not want to hold money because its value is at its lowest. B) want to hold bonds because the interest rate is quite high. C) do not want to hold bonds because their price is likely to decrease. D) want to hold bonds because their price is high. E) a, b and d
Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. Her total revenue for the year was $100,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year.Christine's opportunity cost of working as a consultant last year was ________.
A. $36,000 B. $15,000 C. $51,000 D. $40,000