Homework Answers
Real value tells us the number of units we are able to buy with the given dollar. Assume the price of the good is $1 and income is $10 which means that you can buy 10 units of it. When price rises to $2 with other things remains the same, you will be able to buy only 5 units. This means that there is fall in real value of dollar. Rise in price cause real money supply to fall because of the fall in ability of goods to buy which cause rate of interest to rise.
Option A is correct.
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why the wage rates relate to price level? ro 38. The wage rate rises. As a...
why the wage rates relate to price level?
ro 38. The wage rate rises. As a result, in the short run Real GDP will and the price level will _ rise; rise fall; fall remain constant; fall fall; rise rise; fall o
29. Suppose that foreign real national income decreases and labor productivity rises at the same time....
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1. Explain what will happen to the price level real GDP and the unemployment rate in...
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Other things the same, as the price level falls, which of the following increases? a. lending...
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The "law of supply" states that, other things remaining the same, firms produce A. less of...
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why the wage rates relate to price level?
ro 38. The wage rate rises. As a result, in the short run Real GDP will and the price level will _ rise; rise fall; fall remain constant; fall fall; rise rise; fall o
29. Suppose that foreign real national income decreases and labor productivity rises at the same time. Ceteris paribus, what will happen? a. Short-run equilibrium price level rises, real GDP falls b. Short-run equilibrium price level falls, real GDP falls or rises C. Short-run equilibrium price level falls or rises, real GDP rises d. Short-run equilibrium price level falls, real GDP rises
Other things the same, as the price level falls, which of the following increases? a. lending and investment spending b. lending, but not investment spending • C. investment spending, but not lending d. neither investment spending nor lending
The "law of supply" states that, other things remaining the same, firms produce A. less of a good as profits rise. B. more of a good as costs of production rise. C. less of a good as average incomes fall. D. more of a good as the price of the good rises, 12 If a 3 percent increase in price of Nike golf balls leads to a 42 percent decrease in quantity demanded of Nike golf balls, then the demand...
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