According to Keynes, unemployment results from
A. Flexible wages and price.
B. Increased business investment that reduces consumer spending.
C. Insufficient spending on the part of consumers, business, and government.
D. Increased government spending that reduces consumer spending.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. An economic model is robust if it provides results that are testable and verifiable. 2. An easy, but not very insightful, possible explanation for apparently irrational behavior is that it is rational for a people with a taste for the behavior. 3. Most economic explanations can be reduced to the idea that human behavior is primarily a matter of taste. 4. Since economists assume that people act in their own self-interest, economic analysis does not apply to situations where people behave altruistically. 5. A model that is said to be robust is one that has many details and closely mimics reality.
Your company is considering a project that costs $1,000 up front. It generates a revenue stream of $250 a year for four years. The present value of this project is approximately
a. $0.00 b. $790.46 c. $-209.54 d. It cannot be determined with the information given.
It is ____ to identify an asset bubble before it bursts ____ to identify an asset bubble after it bursts.
A. simple; and also simple B. simple; but difficult C. difficult; but simple D. difficult; and also difficult
An increase in the interest rate would induce people to
A. get rid of all their money and buy stocks with it. B. hold a smaller fraction of their wealth in the form of money. C. sell their least liquid assets and hold more money in case interest rates go up again. D. sell shares of stock and buy bonds, but would have no effect on their desire to hold money.