Suppose the U.S. public holds $1 trillion in government bonds, all with an 8 percent nominal interest rate
If the Federal Reserve can hold that nominal rate constant, what inflation rate would make the government's net interest expense exactly zero? A) 16 percent
B) 8 percent
C) 0 percent
D) -8 percent
B
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Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista's marginal cost curve and the market price. If Bill and Krista sell 60 plants per week at $8 per plant, their producer surplus from all their plants is
A) $8. B) $480. C) $240. D) $0. E) More information is needed to answer the question.
If the government institutes an investment tax credit and decreases income taxes,
a) real GDP falls, and the price level could rise, fall, or stay the same. b) real GDP and the price level fall. c) real GDP rises, and the price level could rise, fall, or stay the same. d) real GDP and the price level rise.
If M were 500 and V were 8, how much would PQ be?
What will be an ideal response?
Answer the following questions true (T) or false (F)
1. In monopolistic competition, if a firm produces a highly desirable product relative to its competitors, the firm will be able to raise its price without losing any customers. 2. When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect. 3. If the marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.