When prices are rising, which of the following will be true?
A) The real interest rate will be lower than the nominal interest rate.
B) The real interest rate will be negative.
C) The real interest rate will be higher than the nominal interest rate.
D) The nominal interest rate will be negative.
Answer: A
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The relationship in the above figure indicates that
A) a decrease in the interest rate leads to a decrease in household income. B) a decrease in household consumption leads to a decrease in interest rates. C) a decrease in household income will lead household consumption to increase. D) none of the above.
The figure above shows the marginal revenue and long-run cost curves for a perfectly competitive firm. All other firms in the industry have identical curves. Which of the following statements is TRUE?
A) The firm's average cost exceeds the price. B) Over time, firms will enter this industry. C) The firm is earning economic profit. D) None of the above is true.