If Steve's Apple Orchard, Inc is a perfectly competitive firm, the demand for Steve's apples has
A) zero elasticity.
B) unitary elasticity.
C) elasticity equal to the price of apples.
D) infinite elasticity.
D
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In the specificfactors model, an increase in the price of the manufactured good will cause:
a. a decrease in nominal wages in both the agricultural and manufacturing sectors. b. an increase in real wages in both the agricultural and manufacturing sectors. c. an increase in both nominal and real wages in both the agricultural and manufacturing sectors. d. an increase in nominal wages in both the agricultural and manufacturing sectors.
Given a central bank's monetary policy reaction curve, if inflation increases by 1% why would policymakers likely have to increase the nominal interest rate by more than the increase in the expected rate of inflation?
What will be an ideal response?