Which of the following might cause the real value of money to rise in an economy?
a) The government prints $1 million in new bills to finance its spending.
b) The average price of food items rise by 20%.
c) The price of houses and apartment rentals falls by 30%.
d) Other countries in the world demand less of this money.
Ans: c) The price of houses and apartment rentals falls by 30%.
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The demand for an input used in a fixed proportions technology
A) is identical to the demand for the other inputs. B) is greater than the demand for the end product itself. C) lies below the demand for the end product itself. D) is the same as the demand for the end product itself.
Refer to Figure 9.8. If free trade in sugar is replaced by a $50 tariff on sugar, the effect on domestic producer surplus will be to
A) lower it by $50. B) lower it by $12,500. C) leave it unchanged. D) raise it by $50. E) raise it by $12,500.