In the long run, when an economy experiences inflation, the price level ________ and the nominal interest rate ________
A) rises; falls
B) rises; rises
C) rises; remains constant
D) remains constant; rises
E) falls; rises
B
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Refer to Table 7-5. Fill in the following table with the opportunity costs of producing bows and arrows for Tran and Farah
Pens Pencils Tran Farah
An individual's demand curve for a good is derived by
a. varying the income level and observing the resulting total utility derived from both goods. b. varying the price of one good and observing the resulting quantities of the other good. c. shifting the budget line to the left and calculating the loss in total utility. d. varying the price of one good and observing the resulting quantities demanded of that good.
Which of the following demonstrates opportunity cost?
A. With a new strain of wheat, the wheat crop of Canada grows by 20% with no change in the productive resources devoted to wheat farming. B. A tax cut increases people's purchases of consumer goods and decreases state expenditures on education. C. The ravages of World War II reduced Japan's ability to produce goods. D. Flora gets a 10% raise and increases her expenditures on movies.
A reduction in the unemployment rate will tend to cause which of the following?
A) an increase in the separation rate B) a reduction in the nominal wage C) a reduction in the duration that one is unemployed D) none of the above