For a signal between two adversaries to be credible, it must
A. be costly to fake or duplicate.
B. be verified by a third party.
C. be part of a sequence of transactions.
D. have both a good news-bad news component.
Answer: A
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If total output increases from $100 billion to $200 billion as population increases from 100 million to 150 million, then output per person:
A. doubles. B. decreases C. increases, but by less than 100 percent. D. remains constant.
If the nominal interest rate is 4 percent and the inflation rate is 1 percent, then the real rate of interest is
A) 1 percent. B) 3 percent. C) 4 percent. D) 5 percent.
A market in which a price-controlled good is sold at an illegally high price is known as
A) a flooring market. B) a ceiling market. C) a black market. D) a supermarket.
For a perfectly competitive firm the break-even price is equal to the shutdown price in the short run
a. True b. False Indicate whether the statement is true or false