Following a recession businesses are likely to be ________ and thus ________ the user cost of capital
A) optimistic; overestimate
B) pessimistic; overestimate
C) optimistic; underestimate
D) pessimistic; underestimate
B
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The curve labeled A in the above figure will shift rightward when
A) the price level falls. B) technology increases. C) population falls. D) the price level rises.
According to the quantity theory of money, in the long run, an increase in the quantity of money results in an equal percentage increase in ________
A) the price level B) the growth rate of real GDP C) the inflation level D) the growth rate of potential GDP
Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.
Workers expecting inflation will expect wage increases to be built into their wage contracts
a. True b. False Indicate whether the statement is true or false