In the United States in the late 1970s, nominal interest rates were high and inflation rates were very high. As a result, real interest rates were
a. very high.
b. high.
c. low, but never negative.
d. low, and in some years they were negative.
d
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The price of peaches goes up and I observe you buying fewer strawberries. Which of the following is consistent with this observation:
A. Strawberries are inferior and peaches are normal. B. Strawberries are normal and peaches are inferior. C. Both strawberries and peaches are inferior. D. Both (a) and (b). E. Both (a) and (c). F. Both (b) and (c). G. All of the above.
Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call
A) a relative price. B) a money price. C) an indexed price. D) an opportunity price.
Supply-side economists:
a. saw influence beyond in both the Bush and Clinton administrations. b. disagreed with economist Arthur Laffer's views on taxes. c. were influential in President Reagan's decision to change the tax structure. d. believe that government regulations do not reduce productivity and undermine industrial efficiency.
The substitution effect shows that when the wage rate increases
a. an additional hour of labor is not worth pursuing. b. an additional hour of leisure is now less costly in terms of foregone consumption. c. an additional hour of leisure is now more expensive in terms of foregone consumption. d. there will be intertemporal substitution.