The Keynesian model is based on the idea that
A. both consumption and saving are positively related to real disposable income.
B. both consumption and saving are unrelated to the level of real Gross Domestic Product (GDP).
C. consumption is unrelated to the level of real Gross Domestic Product (GDP).
D. saving depends only on the interest rate.
Answer: A
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A straight-line demand curve has the same elasticity throughout its length.
Answer the following statement true (T) or false (F)
Unemployment rates in the United States during the past 60 years
A) have remained between 4 and 6 percent. B) have risen and fallen in a range between approximately 10 and 25 percent. C) have risen and fallen in a range between approximately 4 and 10 percent. D) have fallen steadily from approximately 10 percent 40 years ago to near 2 percent today. E) have risen steadily and today are near all-time highs.
Based on this consumer surplus graph, what would Emily decide about buying a third glass of tea?
a. She will buy it because the consumer surplus is much higher than for earlier glasses. b. She won’t buy it because her willingness to pay is less than the market price. c. She will buy it because the market price is lower than her willingness to pay. d. She won’t buy it because the market price is above the price ceiling established for tea.
Because there is an imbalance of information in a lending situation, we must deal with the problems of adverse selection and moral hazard. Define these terms and explain how financial intermediaries can reduce these problems
What will be an ideal response?