Chapter 1.A, Problem 3AQ

Indicate whether each of the following relationships is usually a direct relationship or an inverse relationship. a. A sports team’s winning percentage and attendance at its home games. b. Higher temperatures and sweater sales. c. A person’s income and how often he or she shops at discount stores. d. Higher gasoline prices and miles driven in automobiles.

Suppose that when the interest rate on loans is 16 percent, businesses find it unprofitable to invest in machinery and equipment. However, when the interest rate is 14 percent, $5 billion worth of investment is profitable. At 12 percent interest, a total of $10 billion of investment is profitable. Similarly, total investment increases by $5 billion for each successive 2-percentagepoint decline in the interest rate. Describe the relevant relationship between the interest rate and investment in a table, on a graph, and as an equation. Put the interest rate on the vertical axis and investment on the horizontal axis. In your equation use the form i = a + bI, where i is the interest rate, a is the vertical intercept, b is the slope of the line (which is negative),and I is the level of investment.

Consider the following data on the X-product: a) What was the growth rate of nominal GDP between 2010 and 2011? b) What was the growth rate of the GDP deflator between 2010 and 2011? c) What was real GDP in 2010 measured in 2005 price? d) What was real GDP in 2011 measured in 2005 price?

The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Eileen spends all of her money on paperback novels and mandarins. In 2015, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00.   Which of the following give the nominal value of a variable? Check all that apply.   Eileen's wage is $27.00 per hour in 2015.   The price of a mandarin is $3.00 in 2015.   Eileen's wage is 3 paperback novels per hour in 2015.     Which of the following give the real value of a variable? Check all that apply.   Eileen's wage is 9 mandarins per hour in 2015.   The price of a paperback novel is 3 mandarins in 2015.   Eileen's wage is $27.00 per hour in 2015.     Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Eileen's wage has risen to $54.00 per hour. The price of a paperback novel…

Which one of the following is not true about slope? A, It is vertical change over horizontal change B, The slope of a line represents the change in one variable that occurs when the other variable changes C, The slope of straight line between  any two point on the line is negative D Slope= y2-y1/x2-x1

what relationship does IS curve plot? explain in words and graphically, why IS curve slops downward.