If the ____ is/are fixed, a change in nominal income is equivalent to a change in real income
a. price level
b. interest rates
c. tastes and preferences
d. future expectations
a
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Explain the equity-efficiency trade-off. Give an example of conflicting equity and efficiency outcomes of a policy
What will be an ideal response?
Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $3,500 . Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to: a. shut down as quickly as possible because the stand is generating losses
b. keep the stand open because it is generating a normal profit. c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs. d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.