If the price level in an economy decreases, other things constant, people consume _____
a. more because nominal income falls
b. less because nominal income rises
c. more because the real value of their wealth increases
d. less because real income decreases
e. less because the real value of their wealth decreases
c
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The benefit of holding money is ________, while the opportunity cost of holding money is ________.
A. its usefulness in carrying out transactions; the nominal interest rate B. increased income; lost purchasing power C. the nominal interest rate; the fees charged by banks D. the nominal interest rate; its usefulness in carrying out transactions
All taxes impose an excess burden.
A. True B. False C. Uncertain
During 2000, the government repurchased $30 billion in U.S. Treasury bonds outstanding. This was the first time this had been done since the administration of Herbert Hoover in the early 1930s
Analyze the impact of this repurchase on the bond market.
Which of the following is not a result of rent controls?
a. reduced incentives to build new rental housing b. reduced incentives for landlords to keep rental units in good repair c. increased discrimination against people deemed undesirable on the part of landlords d. increased turnover as tenants move more frequently from one rental unit to another