During periods of deflation, the nominal interest rate will be
a. higher than the real interest rate
b. lower than the real interest rate.
c. the same as the real interest rate.
d. possibly higher, lower, or the same as the real interest rate. The answer depends on how much deflation there is in the economy.
b
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An increase in the reserve requirement ________ required bank reserves and ________ the money supply
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
According to your authors, a necessary condition for the evolution of a successful commercial society includes
A) stable interest rates. B) reasonably secure property rights. C) a superabundance of natural resources. D) zero economic losses.
Which of the following are examples of a firm experiencing a positive technological change?
a. A firm is able to reduce its inputs by 15 percent and still produce the same level of output. b. A seminar attended by the firm's workers makes them more productive. c. A firm adds 5 percent to its workforce and is able to maintain its initial level of output. d. A firm restructures its distribution system and is able to save on its shipping times. e. A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.
Which of the following statements about quotas is correct?
a. They benefit domestic consumers through lower prices. b. They benefit domestic producers through higher prices. c. They raise world output. d. They cause outward shifts in the domestic and foreign production possibilities frontiers. e. They benefit domestic producers through increased competition that stimulates innovation.