Your roommate argues that he can think of no better situation than living in a deflationary economy, as prices of goods and services would continuously fall. You disagree and argue that during a deflation, people can be made worse off because
A) the value of the real interest rate will drop below the nominal interest rate.
B) borrowers will have to pay increasing amounts in real terms over time.
C) the purchasing power of people's incomes would increase.
D) the purchasing power of the currency would decrease.
B
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The burden of the debt does not depend on whether debt finance crowds out private investment.
A. True B. False C. Uncertain
Draw a graph showing the effects of imposing a tariff in the small country case. Describe the results, using the concepts of producer surplus, consumer surplus and deadweight loss
Specifically address the effects on consumers, producers, government revenue and overall national well being, connecting those effects to areas of your graph.
If total cost increases as output increases, then: a. marginal cost must be equal to zero. b. marginal cost must be positive
c. marginal cost must be negative. d. marginal cost must be increasing.
The imposition of a tax on a good or service would be represented as
A. an increase in demand. B. an increase in supply. C. a decrease in demand. D. a decrease in supply.