Economists assume people behave
A. greedily.
B. irrationally.
C. instinctively.
D. rationally.
Answer: D
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Sarah is considering lending an amount of $45,000 to her friend who promises to return $60,000 after the end of ten years
What is the net present value of Sarah's investment? Is it worthwhile to undertake this investment? Assume that the market rate of interest is 6%.
Refer to Figure 4.3. All else equal, an increase in net exports accompanied by a decrease in expected future profits would cause which of the following shifts?
A) S1 to S2 and D1 to D2 B) S2 to S1 and D1 to D2 C) S1 to S2 and D2 to D1 D) S2 to S1 and D2 to D1
The crisis reflects a major intellectual failure of macroeconomics to understand the macroeconomic importance of
A) financial system. B) growth. C) unemployment. D) inflation.
A natural monopoly exists when a single seller experiences ____________ average total costs than any potential competitor.
a. higher b. lower c. equal d. sometimes higher and sometimes lower