Which of the following is not correct?
a) During economic contractions most firms experience dwindling profits.
b) Recessions come at irregular intervals and are almost impossible to predict.
c) When real GDP expands, the rate of unemployment rises.
d) Short-run fluctuations in economic activity can happen in developed countries such as the U.S.
Ans: c) When real GDP expands, the rate of unemployment rises.
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The wealth effect is another term for the
A) the interest rate effect. B) the real-balance effect. C) substitution effect. D) the indirect effect.
Demand curves can be affected by the prices of related goods
a. True b. False Indicate whether the statement is true or false
Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is U = (M)2. Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. Are you a risk taker?
What will be an ideal response?
Leverage is best defined as:
A. low interest rates at the beginning of the term of a loan that later rise. B. using friends inside the banking industry to secure loans. C. the ability of people without income to secure mortgages. D. the practice of buying an asset with borrowed money.