The short-run aggregate supply curve is horizontal if
A) resources were fully utilized.
B) there are unutilized resources in the economy.
C) resources are perfectly adaptable between production processes.
D) there are high inflation rates.
B
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Suppose that the expected inflation rate is 3 percent and the actual inflation rate is 6 percent. Then borrowers
A. are worse off and lenders are better off. B. and lenders are both worse off. C. are better off and lenders are worse off. D. and lenders are both better off.
According to the Coase Theorem, so long as property rights are established and transactions costs are low, plaintiffs in court cases involving externalities will not care which way a judge decides.
Answer the following statement true (T) or false (F)
Unlike developed countries, people in under-developed countries usually haggle over the prices of everyday items because:
a. the cost of production is low. b. the products are in general of poor quality. c. of the differences in the opportunity cost of time. d. adequate substitutes are available.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions balance in the context of the Three-Sector-Model? a. The quantity of real loanable
funds per time period falls and current international transactions balance becomes more negative (or less positive). b. The quantity of real loanable funds per time period rises and current international transactions balance becomes more negative (or less positive). c. The quantity of real loanable funds per time period and current international transactions balance remain the same. d. The quantity of real loanable funds per time period rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.