In the United States, who determines the combination of bond and money creation that finances the federal budget deficit?
A) the federal government itself
B) the Federal Reserve
C) the private banking system
D) private bond- and money-holders
B
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Firms in perfectly competitive markets who wish to maximize profits should:
A. keep producing more as long as marginal cost is less than marginal revenue. B. produce less as long as marginal cost is greater than marginal revenue. C. produce where marginal cost and marginal revenue are equal. D. All of these are true.
The study of how one business firm sets its prices would fall under the study of:
a. Economic growth b. Microeconomics c. Income distribution d. Macroeconomics
Stock market bubbles are:
A. synonymous to stock market crashes. B. the increase in a stock's price resulting from reported higher profits by a firm. C. those periods of time when the overall level of the stock market is rising at a slow rate reflecting market fundamentals. D. persistent and expanding gaps between stocks' actual prices and the prices warranted by the fundamentals.
Use the following information to answer the next several questions:Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively. Based on the information in Scenario 1, nominal GDP grew by about ________ percent from 2015 to 2016.
A. 23 B. 31 C. 62 D. 162