A higher inflation rate can lead to lower unemployment if ________ mistakenly expect the inflation rate to be lower than it turns out to be
A) workers, but not employers B) employers, but not workers
C) both workers and employers D) neither workers nor employers
D
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A decline in interest rates tends to expand the economy by
a. encouraging private investment and decrease in bank lending. b. appreciating the currency and lowering the profitability criterion for investments. c. decreasing the cost of capital and reducing net exports. d. depreciating the currency and raising net exports.
Suppose that a small business takes in monthly revenue of $200,000 . Labor, rental, energy, and other purchased input costs come to a total of $170,000 . The owner/entrepreneur's monthly opportunity cost of her time invested in the business is $5,000 (this is what she could earn working elsewhere), and the owner/entrepreneur could get a return of $5,000 each month if she sold her business and
invested the net proceeds in a financial asset such as a treasury bond. Which of the following correctly describes her monthly economic profit? a. $200,000 b. $190,000 c. $30,000 d. $20,000