Stable money and prices are a key source of economic growth because
a. they allow activist policymakers to fine tune the economy.
b. uncertainty and instability in prices will attract investors and business decision makers.
c. price instability increases capital formation.
d. price stability reduces the risks that accompany investment and other long-term commitments.
D
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Under perfect competition, which of the following are the same (equal) at all levels of output?
a. Price and marginal cost b. Price and marginal revenue c. All of the answers are correct. d. Marginal cost and marginal revenue
When the supply of credit is fixed, an increase in the price level stimulates the demand for credit, which in turn reduces consumption and investment spending. This argument is called the:
A. real balances effect. B. interest-rate effect. C. net exports effect. D. substitution effect.
Figure 18.3Refer to Figure 18.3. The opportunity cost of producing pogo sticks in Livonia is:
A. 2/3 of a scooter. B. 4/5 of a scooter. C. 6/5 scooters. D. 1.25 scooters.
Which of the following items would be considered scarce?
A) water B) diamonds C) potato chips D) All of the above are scarce.