Government is on the:
A. demand side of factor markets and the supply side of goods markets.
B. supply side of factor markets and the demand side of goods markets.
C. demand side of both factor markets and goods markets.
D. supply side of both factor markets and goods markets.
Answer: C
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Business cycles ________, and recessions ________
A) are of equal length; are of equal severity B) are of equal length; differ in severity C) vary in length; are of equal severity D) vary in length; differ in severity
When purchasing autos and other durable goods, consumers tend to use discount rates that are inversely proportional to their income, so the discount rates are lower for consumers with higher income. The key reason for this behavior is that:
A) lower income consumers face very strict cash constraints, and they expect these problems to get worse in the future. B) high income consumers tend to have lower opportunity costs for money. C) high income consumers tend to make long-term investments (e.g., 30-year bonds), which always pay lower interest rates than short-term investments. D) none of the above
Suppose you read in the Irish daily the Dublin Telegraph that saving in Ireland in 2003 was precisely the intended investment Irish businesses had hoped to make. You would conclude that in 2003, the Irish economy was
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