If the MPS is 0.1, the tax multiplier is
A. 10.
B. -5.
C. -9.
D. -10.
Answer: C
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Insurance deductibles __________ the __________ problem of insurance coverage.
A. are meant to reduce; adverse selection B. are meant to reduce; moral hazard C. unintentionally worsen; adverse selection D. unintentionally worsen; moral hazard
The terms of trade equation is written as
a. index of export prices – index of import prices b. 100 × (index of import prices × index of import prices) c. 100 × (index of import prices + index of export prices) d. 100 × (index of import prices/index of export prices) e. 100 × (index of export prices/index of import prices)
_________ include inflationary conditions, significant competition, high interest rates, weak economic indicators, shrinking of the money supply by the government, and the political environment.
a. Internal constraints b. External constraints c. Budgets d. Economic environments e. Balance sheets
Gonzo consumes only two things--coke and hot dogs. We can define the addition to "happiness" of consuming an additional coke as the marginal utility of coke and that for hot dogs as the marginal utility of hot dogs. The prices of coke and hot dogs are fixed and Gonzo has a limited budget. To maximize "happiness" subject to his limited budget, Gonzo should purchase coke and hot dogs so that
A. the addition to happiness of the last coke is the same as the addition to happiness of the last hot dog. B. the marginal utility of coke is the same as the marginal utility of hot dogs. C. he spends the same amount on coke as on hot dogs. D. the addition to happiness per dollar spent on coke is the same as the addition to happiness per dollar spent on hot dogs.