In the above figure, the marginal cost of the last unit produced by the profit maximizing firm is

The change in import spending due to a change in domestic real income is called:

A) marginal propensity to save. B) marginal propensity to consume. C) marginal propensity to import. D) none of the above.

Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that

a. lenders must have expected inflation. b. borrowers must have expected deflation. c. lenders must have expected prices to fall. d. borrowers must have expected prices to fall.