If you lend a dollar for a year and at the end of the year the price level has risen by 10 percent
A) the purchasing power of your loan has risen over the year regardless of the interest rate at which you lent it.
B) the purchasing power of your loan has remained constant over the year regardless of the interest rate at which you lent it.
C) you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan.
D) you must have earned a nominal interest rate of 5 percent to maintain the purchasing power of your loan.
C
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The largest budget deficit the U.S. federal government has ever had was
A) $3.9 trillion in 1975. B) $3.0 trillion in 2014. C) $1.4 trillion in 2009. D) $600 billion in 1997.
Assume that Johnson deposits $350 of currency in his account in the XYZ Bank. Later the same day Swanson negotiates a loan for $2,000 at the same bank. In what direction and by what amounts has the supply of money changed?
A. Decreased by $1,650. B. Increased by $2,000. C. Increased by $2,350. D. Decreased by $350.
Many economists are critical of the minimum wage because they believe that it:
A. hurts the efforts of labor unions. B. reduces the number of available job opportunities. C. conflicts with policies designed to equalize the distribution of income. D. causes labor shortages in affected markets.
A firm is more likely to have a natural monopoly when:
A. the size of the market is small relative to the efficient scale of the firm. B. the size of the market is large relative to the efficient scale of the firm. C. the firms face no or low fixed costs. D. the government grants the firm an exclusive license to operate.