Ceteris paribus, if the average price level falls, then the _____ effect will result in _____ in the purchases of goods and services.
A. Real balances; an increase
B. Foreign trade; a decrease
C. Interest rate; a decrease
D. Cost; an increase
Answer: A. Real balances; an increase
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China's prosperity brings income gap The Asian Development Bank [ADB] reports that China has the largest gap between the rich and the poor in Asia
Ifzal Ali, the ADB's chief economist, claims it is not that the rich are getting richer and the poor are getting poorer, but that the rich are getting richer faster than the poor. Source: Financial Times, August 9, 2007 Explain how the distribution of personal income in China can be getting more unequal even though the poorest 20 percent are getting richer.
In countries with very restrictive labor laws , many firms are reluctant to hire workers. This reluctance can
A) reduce cyclical unemployment and the natural rate of unemployment. B) reduce structural unemployment and the natural rate of unemployment. C) reduce frictional unemployment and the natural rate of unemployment. D) increase the natural rate of unemployment.
Which of the following is correct with regard to the supply of money?
a. The money supply is inversely related to the interest rate. b. The money supply is independent of the interest rate. c. The money supply is positively related to the interest rate with a relatively flat slope. d. The money supply curve is horizontal. e. The money supply is positively related to the interest rate with a relatively steep slope.
Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $48
a. True b. False Indicate whether the statement is true or false