The change in the cost of living over time is referred to as:
A. inflation.
B. substitution bias.
C. a fixed-weight price index.
D. real income.
A. inflation.
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If the exchange rate is defined as the price of the foreign currency in terms of the domestic currency, an increase in the exchange rate:
a. increases domestic demand for foreign goods. b. makes domestic goods cheaper in the foreign markets. c. lowers net exports. d. lowers aggregate expenditure on domestic goods. e. increases the domestic country's external debt burden.
If the price elasticity of demand is equal to 0, then demand is unit elastic
a. True b. False Indicate whether the statement is true or false
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
Saving time by driving faster is an example of a ________ of driving faster. Increasing the severity of injuries from a potential accident due to driving faster is a(n) ________ of driving faster.
A. nominal cost; real cost B. marginal cost; nominal cost C. marginal benefit; marginal cost D. normative benefit; opportunity cost