Which of the following is a characteristic of pure capitalism?
a. all resources are owned communally
b. economic activity is coordinated by government decision makers
c. the price system is used to guide resources to their highest-valued uses
d. centralized economic planning is used to answer the basic economic questions
e. individual choices are reflected only through collective decisions
C
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Which of the following is a definition of the real interest rate in a world with a positive inflation rate?
a. The percentage increase in the borrower's purchasing power from taking a loan b. The percentage decrease in the borrower's dollars from taking a loan c. The percentage increase in the lender's purchasing power from making a loan d. The percentage increase in the lender's dollars from making a loan e. The percentage decrease in the lender's dollars from making a loan
When a firm experiences diminishing marginal product, what is the shape of the curve that represents the value of the marginal product of labor?
a. U-shaped b. vertical c. downward sloping d. upward sloping