Real wealth falls, interest rates rise, and the dollar appreciates as the price level
a) remains constant.
b) falls slightly.
c) rises.
d) falls substantially.
Answer: c) rises.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
If a monopolist was operating in a price range where marginal revenue was negative, it would be
A) in the inelastic range of the demand for its product. B) in the unit elastic range of the demand for its product. C) in the elastic range of the demand for its product. D) maximizing revenue but not profits.
The time and money spent by a monopoly firm on lobbying for favorable government policies is called
a. the capitalized value of the firm b. limit pricing c. rent-seeking activity d. administered pricing e. implicit cost
Rhonda has started a new job that almost doubles her income. She walks past the inexpensive ramen in the grocery store and thinks, “Well, I don’t have to eat that anymore!” Instead, she purchases some fresh vegetables and a steak. To Rhonda, the ramen falls into the category of _____________, because now that she can afford better, she doesn’t want it.
a. normal goods b. temporary goods c. inferior goods d. nonutility goods