When the price level goes up, the purchasing power of the dollar
A. varies directly with the interest rate.
B. falls.
C. remains constant.
D. also increases.
Answer: B
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What is wrong in an economy when society can transform 1,000 apples into a tent or a tent into 1,000 apples, but the marginal rate of substitution of apples for tents by consumers is 500? Explain how the market automatically will solve this problem.
What will be an ideal response?
Exhibit 5-5 Gross domestic product data National income accountBillions ofdollars Depreciation$ 500 Net interest 2,000 Compensation of employees 6,000 Profits 1,500 Rental income 200 Indirect business taxes 800 Net exports 1,000 As shown in Exhibit 5-5, national income (NI) is:
A. $9,000 billion. B. $9,900 billion. C. $10,500 billion. D. $11,000 billion.
When net taxes increase and government purchases decrease, _____
Fill in the blank(s) with the appropriate word(s).
Figure 17.2 depicts a firm's marginal revenue product curve. Suppose that we observe the firm demanding three workers. If the firm is maximizing its profit, the wage rate must be between ________ and ________.
A. $30; $35 B. $25; $30 C. $20; $25 D. $15; $20