When prices increase, the real interest rate
A. will decrease and total planned spending on goods and services will decrease.
B. will increase and total planned spending on goods and services will decrease.
C. will increase and total planned spending on goods and services will increase.
D. will not be affected.
Answer: B
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The People's Bank of China has
A) allowed a flexible exchange rate to boost exports. B) managed its exchange rate to help control inflation. C) strictly followed a fixed exchange rate to boost exports. D) purchased U.S. dollars to appreciate the yuan.
A perfectly competitive firm would be willing to remain in the industry in the long run at zero economic profit because
A. its total revenues would be positive. B. accounting profit would be negative. C. revenue is equal to all costs, including the opportunity cost of capital and labor. D. its fixed costs would prevent it from leaving the industry.
When the supply of labor to a firm is perfectly elastic the marginal factor cost will equal the
A) market price of the product. B) wage rate. C) marginal physical product. D) wage rate times the number of workers.
If country A has a higher opportunity cost in producing good X than does country B, then we know that
A. country B has an absolute advantage in the production of product X. B. country B has a comparative advantage in the production of product X. C. country A has an absolute advantage in the production of product X. D. country A has a comparative advantage in the production of product X.