The value of money

a. is directly related to the price level.

b. is inversely related to the price level.

c. is determined by the real interest rate.

d. is determined by the nominal interest rate.

Whenever a society forgoes current consumption to invest in capital goods, the

a. less the society can consume next year.

b. easier it will be for the society to consume less in the future because people will become accustomed to less.

c. more the society can produce and consume in the future.

d. less capital the society can produce in the future.

Scarcity is illustrated graphically by a production possibilities frontier.

a. True

b. False

Nominal GDP measures output in terms of current prices. Therefore, part of an increase in nominal GDP can be attributed to inflation.

a. True.

b. False.

A country's gross domestic product, or GDP,

a. is the value of all final goods produced in a country during a given period of time.

b. is the value of final services produced in a country during a given period of time.

c. is the value of all intermediate goods and services produced in a country during a given period of time.

d. is the value of all final goods and services produced in a country during a given period of time.

Within a given period of time, which of the following must be true?

a. The income earned by households must be equal to investment by firms.

b. Total spending in the economy must equal total income.

c. Total spending must be less than total income.

d. Total income must be less than total spending.