During periods of high inflation, such as the 1979-1980 period, the existence of usury laws may cause
a. nominal rates of interest to be above real rates.
b. negative nominal rates of interest.
c. negative real rates of interest.
d. real rates of interest to be above nominal rates.
c
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What is meant by the term "optimization"? What do economists usually believe about how individuals optimize?
What will be an ideal response?
Scarcity is a situation in which ________
A) some people are poor and others are rich B) something is being wasted C) we are unable to satisfy all our wants D) long lines form at gas stations
Suppose an individual knows that the marginal utility he receives from the next apple is 5 and that the price of an apple is $2 . He also knows that the marginal utility he receives from the next orange is 3 and the price of an orange is $1 . If the individual is choosing optimally, the next good he will buy is a. an orange because the marginal utility per dollar spent on an orange is
greater. b. an orange because the marginal utility of the orange is greater. c. an apple because the marginal utility per dollar spent on an apple is greater. d. an apple because the marginal utility of the apple is greater.
According to the classical dichotomy, when the money supply doubles, which of the following also doubles?
a. the price level and nominal wages b. the price level, but not the nominal wage c. the nominal wage, but not the price level d. neither the nominal wage nor the price level