The nominal interest rate ________
A) makes no allowance for inflation
B) is a percentage of the amount borrowed
C) is the rate that most banks advertise
D) all of the above
E) none of the above
D
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If household saving decreases by $3 million, business saving increases by $1 million, and the government budget deficit increases by $2 million, then private saving ________ and public saving ________.
A. decrease; decreases B. increases; decreases C. does not change; increases D. increases; does not change
The following graph is the production possibilities frontier of a nation:
Refer to the graph. The combination "5 drill presses and 2 units of bread" indicates an
A. inefficient combination for the nation. B. ideal combination for the nation. C. efficient combination for the nation. D. unattainable combination for the nation.
Each of the following is consistent with the classical theory EXCEPT
A. wages and prices are flexible. B. the economy is always at full employment. C. supply creates its own demand. D. laissez-faire.
If the firm is incurring losses in the short run, then which of the following is true?
A. P < ATC B. P > ATC C. P > MC D. MC > ATC