Which of the following statements is true?
a. Cost-push inflation is caused by an increase in resource costs.
b. If nominal interest rates remain the same and the inflation rate falls, real interest rates increase.
c. All of the answers are correct.
d. Demand-pull inflation is caused by excess total spending.
e. If real interest rates are negative, lenders incur losses.
c
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Sometimes ignoring that money is fungible can be:
A. useful and help someone stay on budget. B. irrational and lead to costly decisions. C. Both of these are true. D. Neither of these is true.
If demand is price elastic, then when price decreases, total revenue:
a. decreases. b. increases. c. does not change. d. is less than one. e. is negative.
Assume, for Japan, that the domestic price of automobiles without international trade is lower than the world price of automobiles. This suggests that, in the production of automobiles,
a. Japan has a comparative advantage over other countries and Japan will import automobiles. b. Japan has a comparative advantage over other countries and Japan will export automobiles. c. other countries have a comparative advantage over Japan and Japan will import automobiles. d. other countries have a comparative advantage over Japan and Japan will export automobiles.
When saving leaks out of the circular flow of income and spending,
A. total income necessarily falls. B. it leaks out of the financial system. C. it flows to borrowers. D. it increases the size of the spending flow.