The purchasing power of money

A. varies inversely with the interest rate.
B. is determined by law.
C. varies inversely with the price level.
D. depends on the value of gold.


Answer: C

Economics

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A recessionary gap exists when the equilibrium level of GDP

a. falls short of potential GDP. b. equals potential GDP. c. exceeds potential GDP. d. causes inventory levels to fall.

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At a price of $20, the marginal revenue of a monopolist is $12. If the marginal cost of production is $10, what should the monopolist do in order to maximize profits?

A. Increase its price. B. Decrease its price. C. Keep its price at the same level. D. There is not enough information to solve.

Economics

The income effect of a price change results in a

A) movement along the demand curve due to a change in relative prices. B) shift of the demand curve when income changes. C) shift of the demand curve due to a change in purchasing power brought about by the price change. D) movement along the demand curve due to a change in purchasing power brought about by the price change.

Economics

If deviations from trend in a macroeconomic variable are positively correlated with deviations from trend in real GDP, that variable is said to be

A) useful in predicting future movements in real GDP. B) procyclical. C) countercyclical. D) acyclical.

Economics