The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?
What will be an ideal response?
The relative price of a car is $12,000 per car ÷ $1,000 per computer = 12 computers per car. The relative price of a computer is $1,000 per computer ÷ $12,000 per car = 0.083 of a car per computer.
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When deflation occurs,
A) the nominal interest rate is equal to the real interest rate and inflation is positive. B) the real interest rate is greater than the nominal interest rate. C) the nominal interest rate is equal to the real interest rate and inflation is negative. D) the nominal interest rate is greater than the real interest rate.
If there is a negative sign in front of unilateral transfers for the United States, then
A) the United States imported more services than it exported. B) the value of U.S. gifts to foreigners exceeded foreign gifts to U.S. residents. C) the United States imported more commercial financial assets than it exported. D) the United States had a negative balance of trade.