Economists assume that households and firms share two important characteristics. One of these characteristics is that
A) they smooth spending during recessions and expansions.
B) they act rationally to meet their objectives.
C) they only consider the present when making decisions.
D) the growth rate in spending by each is equally volatile.
B
You might also like to view...
When scarce goods are allocated according to some generally known criteria,
A) no one is discriminated against as long as the criteria are socially and legally accepted. B) people will compete to satisfy the criteria. C) rationing of scarce goods becomes unnecessary. D) surpluses almost inevitably appear.
Based on annual data from 2000-2010, the Gadget Company estimates that sales are growing according to a linear trend:
Q = 50,000 + 200t where t is time and t = 0 in 2000. a. Forecast sales for 2013. b. Do you see any problems with this forecasting method?
A firm will hire a unit of input up to the point where
A) the marginal cost of the input equals the marginal cost of output. B) the marginal revenue product of the input is equal to the marginal factor cost of the input. C) the price of the input is equal to the price of output. D) the marginal physical product of the input is equal to the price of output.
An open market purchase of T-bonds by the Fed causes the money supply to
a. fall and bond prices to fall. b. rise and bond prices to fall. c. rise and bond prices to rise. d. fall and bond prices to rise.