Suppose that Jack promises that if Jill chooses the high price, he will too. Jill has no incentive to cheat on the agreement.
Answer the following statement true (T) or false (F)
False
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In the United States for the last 40 years, the nominal interest rate
A) and the real interest rate both decreased in almost every year. B) and the real interest rate were both constant in almost every year. C) was constant in most years and the real interest rate fluctuated. D) exceeded the real interest rate in virtually all the years. E) exceeded the real interest rate in about one half of the years and the real interest rate was greater than the nominal interest rate in the other half of the years.
Capital deepening occurs when
a. the capital stock increases for a given labor force b. the capital stock decreases for a given labor force c. output decreases d. employment increases e. investment decreases
Inflation is undesirable because it:
A. arbitrarily redistributes real income and wealth. B. invariably leads to hyperinflation. C. usually is accompanied by declining real GDP. D. reduces everyone's standard of living.
A fall in the price level brings a ________ in the real wage rate that ________ profits and can lead to ________
A) fall; decreases; new firms entering business B) rise; reduces; firms going out of business C) rise; reduces; new firms entering business D) fall; increases; firms going out of business E) rise; increases; new firms entering business