Suppose that the cost of a loaf of bread in Zanadoo is 20 shillings, and this represents a full day's wages for the typical factory worker. The 20 shillings represents a ____ value while the loaf of bread costing a full day's wage represents a ____ value.
a) real; real
b) nominal; nominal
c) real; nominal
d) nominal; real
Ans: d) nominal; real
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Consider two countries-country A and B. Both countries are exactly similar in all aspects except for one. In country B it is possible for entrepreneurs to borrow money from banks and financial markets
While in country A, there is no loan for entrepreneurshiA) Country A is likely to grow faster than country B. B) Country B is likely to grow faster than country A. C) Both countries are likely to grow at the same rate. D) Resources are likely to be over consumed in country A and under consumed in country B.
Should the Fed only have the single goal of price stability? Why or why not?
What will be an ideal response?
f the dollar appreciates relative to the Yen, it can be said that
What will be an ideal response?
According to the monetarists,
A. the supply of money changes in response to changes in the levels of real output and prices. B. changes in the velocity of money are more important than changes in the money supply in causing the level of economic activity to change. C. an expansionary fiscal policy will lower interest rates and thereby tend to over stimulate the economy. D. changes in the money supply temporarily cause changes in real output and price level but in the long run only prices change.