If the actual rate of inflation is higher than that anticipated by a borrower and a lender while entering a contract, the real rate of interest will be higher than expected
a. True
b. False
Indicate whether the statement is true or false
False
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La Dila and Swiss Pro are the only two firms in an industry. The firms charge equal prices for their products, which are perfect substitutes. La Dila decides to lower its price slightly. Swiss Pro responds by cutting its price further
This price cutting will continue as long as each firm's ________. A) price is lower than marginal cost B) price is higher than marginal cost C) price is higher than zero D) price is higher than the average fixed cost
If an employer's behavior is supportive of the theory of efficiency wages, the employer would
a. raise wages in an effort to increase worker effort. b. raise wages in an effort to increase worker turnover. c. decrease wages in an effort to increase worker effort. d. decrease wages in an effort to increase worker turnover.
When the money market is drawn with the value of money on the vertical axis, the price level increases if
a. money demand shifts right and decreases if money supply shifts right. b. money demand shifts right and decreases if money supply shifts left. c. money demand shifts left and decreases if money supply shifts right. d. money demand shifts left and decreases if money supply shifts left.
In which of the following market structures does a seller have NO market power?
A) Monopoly B) Oligopoly C) Perfect competition D) Monopolistic competition