If the nominal interest rate is below the equilibrium value, then the quantity demanded of money is ________ than the quantity supplied of money, bond prices will ________, and the nominal interest rate will ________.
A. greater; rise; increase
B. less; fall; increase
C. greater; fall; decrease
D. greater; fall; increase
Answer: D
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The opportunity cost of current consumption differs for borrowers and savers only if the interest rate for savers differs from the interest rate for borrowers.
Answer the following statement true (T) or false (F)
Suppose there has been an increase in investment. As a result, real GDP will ________ in the short run, and ________ in the long run
A) decrease; increase to its initial level B) increase; increase further C) increase; decrease to its initial value D) decrease; decrease further
Which of the following statements about setting optimal two-part tariffs for many consumers is NOT true?
A) The number of buyers (entrants) declines as the entrance fee (tariff) increases. B) The profit from the entrance fee (tariff) is a concave function of the tariff because it first increases and then decreases as the tariff increases. C) The profit from the entrance fee (tariff) is a convex function of the tariff because if first declines and then increases as the tariff increases. D) The total profits is composed of the profit from the entrance fee (tariff) and from the profit from sales to buyers.
The situation in which the marginal product of labor is greater than zero and declining as more labor is hired is called the law of:
a. diminishing returns. b. negative response. c. inverse return to labor. d. demand.