An increase in the real interest rate occurs when ________
A) monetary policy responds automatically to an increase in inflation
B) expected inflation increases, relative to the nominal interest rate
C) an increase in autonomous spending causes an increase in equilibrium output
D) all of the above
E) none of the above
A
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The demand for automobiles fell when gasoline prices increased. Which of the following is likely to happen in this case, assuming all else equal?
A) The labor demand curve of automobile companies will shift to the left. B) The labor demand curve of automobile companies will shift to the right. C) The supply of labor to the automobile industry will decrease. D) The supply of labor to the automobile industry will increase.
The category of "rent" in the income approach to GDP
A) does not have any connection to owner-occupied housing. B) includes the money paid to use land and other rented inputs. C) includes the money paid to rent apartments only. D) includes the money paid to rent machinery only. E) includes only the imputed rent for owner-occupied housing.