The real-nominal principle can be stated as:
A. production generates income.
B. only final goods and services should be counted in GDP.
C. what matters to people is the purchasing power of money or income.
D. only the manufacture of real goods is production.
Answer: C
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Which of the following constitutes wealth?
A) A baseball card collection B) A 2014 Ford Focus C) An Italian-made cello D) Money deposited in a savings account E) All of the above, as long as people value all of the goods listed above
Many people believe that a monopolist can set his own price which consumers have little recourse but to pay, and thereby reap enormous profits. Is this true?
Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:
a. $10. b. $14. c. $120. d. $140. e. $240.
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals: a. 0.5
b. the multiplier. c. the slope of the consumption function. d. 1.0. e. the slope of the saving function.