Real variables can only be affected by:
a. unperceived changes in the price level.
b. expected changes in the price level.
c. perceived changes in the price level.
d. actual changes in the price level.
Answer: a. unperceived changes in the price level.
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A) the postal service B) police services C) social security D) food stamps E) a patent on a pharmaceutical drug
The aggregate production function relating real GDP to labor hours
A) has a constant slope. B) has a negative slope. C) has a positive slope and becomes steeper as employment increases. D) has a positive slope and becomes less steep as employment increases.
Assume that a company is producing at a point beyond where diminishing returns has already set in. If the firm cuts back on production what would you expect should happen to the marginal product of labor and why?
What will be an ideal response?
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A. 4 percent a year B. 3 percent a year C. 2 percent a year D. 1 percent a year