During an economic expansion, the demand for money ________ because ________
A) decreases; nominal GDP increases
B) increases; real GDP increases
C) increases; nominal GDP does not change
D) does not change; people make more purchases with credit cards
E) decreases; real GDP increases
B
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Suppose the United States eliminates high tariffs on German bicycles. As a result, we would expect
A. the price of German bicycles to increase in the United States. B. employment to decrease in the U.S. bicycle industry. C. employment to decrease in the German bicycle industry. D. profits to rise in the U.S. bicycle industry.
Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
Exit from a market will occur if economic profits are zero
Indicate whether the statement is true or false
A firm that finds it extremely expensive to monitor the output of each worker will likely pay its workers
A. according to how much each worker produces. B. with incentive pay. C. with time rates. D. on commission. E. with piece rates.