Explain the real-nominal principle.
What will be an ideal response?
The real-nominal principle explains that what matters to people is the real value of money or income, its purchasing power and not the face value of money or income.
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Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?
A) The growth model predicts that poor countries will catch up with rich countries, but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group. B) The growth model predicts that poor countries should catch up with rich countries, but developing countries are not catching up to lower-income industrialized countries as a group. C) The growth model predicts that poor countries will catch up with rich countries, and this is what we observe across all developmental categories of countries. D) The growth model predicts that poor countries will never catch up with rich countries, but lower-income industrialized countries are catching up to higher-income industrialized countries as a group.
Which of the following events prompted the birth of market monetarism?
A) the Great Depression B) the Great Recession C) the 1907 Bankers' Panic D) the establishment of the European Union
Prospect theory would suggest that:
A. Buyers would feel the "loss" due to an increase in the price of something they buy more than the "gain" they'd feel if the price fell by an equal amount B. Buyers would feel the "loss" due to an increase in the price of something they buy less than the "gain" they'd feel if the price fell by an equal amount C. Buyers are more conscious about changes in the size of a chocolate bar than about changes in its price D. Buyers are not fooled by sellers who keep their prices constant but shrink the size of their products
When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the ________ curve for illegal drugs ________
A) demand; rightward B) demand; leftward C) supply; rightward D) supply; leftward