Norma receives an increase in her nominal income. She complains that the current inflation rate of six percent erodes the real purchasing power of her additional nominal income. This is true
a. only if the increase in her nominal income is less than six percent.
b. only if the increase in her nominal income is more than six percent.
c. since inflation always reduces purchasing power.
d. only if her real income increases.
a
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What will be an ideal response?
Fisheria is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology
In 2010, real GDP was $300 million, the quantity of money was $60, and the velocity of circulation of money was 10. In 2015, the price level rose by 20 percent. a) What was the price level in 2014? (The price level is measured by the GDP deflator, which is 100 in the base year. So the price level from the equation of exchange needs to be multiplied by 100 to convert it to the GDP deflator.) b) What was real GDP in 2015? c) What was the velocity of circulation in 2015? d) What was the quantity of money in 2015?
For a firm to maximize total profits through price discrimination, it should
a. Firms should charge a low price to high-value consumers and a high price to low-value consumers b. Firms should charge a high price to high-value consumers and a high price to low-value consumers c. Firms should charge a low price to high-value consumers and a low price to low-value consumers d. Firms should charge a high price to high-value consumers and a low price to low-value consumers
Based on the graphic for perfect competition versus monopoly, the change between the producer surplus of perfect competition and the producer surplus of a monopoly is ______.
a. a – b
b. a + b
c. b
d. –c