Answer the following questions true (T) or false (F)
1. If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive).
2. The costs to firms of changing prices are called menu costs.
3. If inflation is unanticipated, no redistribution of income can occur.
1. TRUE
2. TRUE
3. FALSE
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According to new growth theory, technological change is driven by
A) random chance. B) government policies. C) foreign firms' attempts to increase their sales in the domestic market. D) firms' attempts to increase their profit.
An expensive bottle of balsamic vinegar is an example of an ________ good, and an order of lasagna from Bella's Restaurant is an example of a(n) ________ good.
A) experience; experience B) experience; inspection C) inspection; inspection D) experience; credence
A situation in which the price charged is equal to society's opportunity cost is known as
A) market failure. B) marginal monopoly pricing. C) marginal profits. D) marginal cost pricing.
The AD curve is derived by adding up demand curves for all goods and services
a. True b. False