Which of these situations is most likely to cause the Fed to introduce a tight money supply?
(A) A recession has reduced aggregate demand and increased unemployment.
(B) The economy is expanding quickly and inflation is a concern.
(C) The economy is prosperous with relatively low inflation and low unemployment.
(D) The federal government passes a new budget with a large deficit.
Ans: (B) The economy is expanding quickly and inflation is a concern.
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Which of the following would increase the natural rate of unemployment?
A) an increase in the number of younger, less skilled workers in the economy B) a reduction in the generosity of unemployment insurance programs C) an increase in government-sponsored programs that train unemployed workers so they can find new jobs quickly D) restrictions on the ability of unions to negotiate wage changes with companies
When the market mechanism is allowed to operate freely, prices will determine
A. The mix of output to be produced, the resources to be used in the production process, and for whom the output is produced. B. Only for whom the output is produced and the mix of output to be produced. C. Only the resources to be used in the production process and for whom the output is produced. D. Only the mix of output to be produced and the resources to be used in the production process.
A consultant predicts that there is a 25% chance of earning $50,000 and a 75% chance of earning $100,000. What is the expected profit?
What will be an ideal response?
Which of the following is NOT provided in the textbook as something that might lead to the creation of a new market?
A. New laws B. New buyers C. New sellers D. New services