The opportunity cost of holding money is measured by:
A) short-term nominal interest rate
B) short-term real interest rate
C) long-term nominal interest rate
D) long-term real interest rate
A
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Legal restrictions on competition, such as the grant of patent privileges to inventors,
A) destroy property rights. B) expand property rights. C) both destroy and expand property rights. D) neither destroy nor expand property rights because patents are granted by the U.S. Constitution.
Greater central bank independence is positively related to ________
A) a low rate of unemployment B) the length of terms of Governors on the Board of Governors C) a higher level of GDP D) the ability to fight inflation
Suppose one observes that when the price of peanut butter increases, the demand for jelly increases. One should conclude that:
A. peanut butter and jelly are complements. B. peanut butter and jelly are substitutes. C. peanut butter and jelly are inferior goods. D. peanut butter and jelly are normal goods.
A US unemployment rate of 1.5% creates labor ____ which will cause ____
a. shortages; deflation b. surpluses; deflation c. shortages; inflation d. surpluses; inflation