In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases,
a. the real value of money decreases; in turn, the real value of the dollar increases in foreign exchange markets, which decreases net exports.
b. the real value of money decreases; in turn, interest rates increase, which decreases net exports.
c. households increase their holdings of money; in turn, interest rates decrease, which reduces spending on investment goods.
d. households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods.
d
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We are interested in long-term growth primarily because it brings
A) higher price levels. B) lower price levels. C) higher standards of living. D) trade wars with our trading partners.
The proposition that changes in the money supply have no long-run effect on real variables is known as the ________
A) classical dichotomy B) quantity theory of money C) neutrality of money D) Fisher effect E) none of the above
Demand and Cost Data for Will's Beach Ball CompanyTable 26.1A Monopolistically Competitive FirmPriceDemand Data QuantityCost Data OutputTotal Cost$1166$48$1077$52$988$57$899$63$71010$70Refer to Table 26.1. At the profit-maximizing output and price, Will's Beach Ball Company will earn a ________ economic profit, and ________ the market will occur.
A. negative; exit from B. positive; entry into C. negative; entry into D. positive; exit from
Hours of OperationMarginal Cost16212318424530636742
Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that Krystal's marginal benefit of staying open per hour is $30. If she is following the marginal principle, how many hours should Krystal stay open?
A. 4 hours B. 5 hours C. 6 hours D. 7 hours