Stagflation describes a condition whereby
A. real GDP increases but nominal GDP stagnates at a relatively constant level.
B. real GDP declines at a relatively constant price level.
C. potential real GDP stagnates.
D. real GDP rises or falls very little but inflation persists at fairly high rates.
D. real GDP rises or falls very little but inflation persists at fairly high rates.
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What are the transactions that the balance of payments accounts record?
What will be an ideal response?
A firm's external financing need is met by:
a. debt or equity. b. owners' equity, including retained earnings. c. net working capital and retained earnings. d. net income and retained earnings. e. retained earnings.
Banks may hold the reserves for their customers' deposits as
A. cash in their bank vaults only. B. deposits at the Fed only. C. either cash in their vaults or their deposits at the Fed. D. Federal Reserve Notes.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000If Quick Burger has the legal right to operate a drive-through, and Quick Burger and The Sunshine Café can negotiate with each other at no cost, then will Quick Burger operate a drive-through window?
A. Yes, because Quick Burger's payoff is higher when it operates a drive-through. B. No, because it is not socially efficient to operate a drive-through. C. No, because it would lower the payoff for The Sunshine Café. D. It cannot be determined.