A prediction of the Ricardo-Barro effect is
A) a larger decrease in the real interest rate when the government runs a budget surplus.
B) no effect on the real interest rate when the government runs a budget deficit.
C) a larger decrease in investment when the government runs a budget deficit.
D) a larger increase in the real interest rate when the government runs a budget deficit.
E) a larger decrease in investment when the government runs a budget surplus.
B
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Which of the following is the result of competing through advertising for a monopolistically competitive firm?
a. Long-run average costs shift downward. b. The firm's demand curve become flatter and shifts inward. c. The firm's demand curve keeps the same slope and shifts inward. d. Long-run average costs shift upward.
A dress manufactured in Hagen, Germany, costs 195 euros. What is the U.S. dollar value of the same dress if the exchange rate is $0.89 per euro?
a. $173.55 b. $165.43 c. $219.10 d. $187.61 e. $195.00
Explain why bond prices and interest rates are inversely related
If the price of coffee increases from $2.50 per cup to $3.00 per cup and the quantity demanded goes down from 120 cups per week to 115 cups per week, the absolute value of price elasticity of demand in that price range is approximately
A) 0.23. B) 4.35. C) 0.93. D) 2.34.