If inflation does not adjust rapidly in the short run, then when the Federal Reserve decreases the nominal interest rate, the real interest rate in the short run will ________.
A. be determined by saving and investment decisions.
B. decrease
C. increase
D. not change
Answer: B
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Suppose a study finds most pot-smokers drank milk as young children
If we reach the conclusion that because most pot smokers "started" on milk, milk drinking "leads" to pot-smoking (at least among certain susceptible groups of milk users), we are most likely A) engaging in correct analysis. B) confusing statistical correlation with causation. C) following the axioms of selfish interests. D) assuming people really do not know what is in their own interests.
What do most economists believe about international trade?
a. It benefits all participants with no one harmed in the country. b. It benefits only big corporation but harms everyone else in a country. c. It benefits the majority of people but some people are harmed. d. It benefits no one and harms many people in the economy.
A firm may choose to raise price when
A. profits would increase at the higher price. B. MR > MC. C. average profit is zero. D. it relies on marginal analysis.
Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale. In which country’s GDP is this production included?
A. Japan B. Both Japan and the United States C. In Japan as retail value and the United States as wholesale value D. Half the value in Japan and half in the United States E. The United States