For the recessions in the United States since the 1950s
A) inflation has been nonexistent.
B) the inflation rate rises on average by about 2.5 percentage points 12 months after a recession begins.
C) the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins.
D) deflation occurs.
Answer: C) the inflation rate falls on average by about 2.5 percentage points 12 months after a recession begins.
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The last U.S. president to be in office when the government had a budget surplus was
A) George H. Bush. B) Dwight D. Eisenhower. C) Ronald Reagan. D) George W. Bush. E) Bill Clinton.
Refer to Scenario 17.4. Moral hazard arises in this situation because once the firm
A) pays the premium that is based on the .005 probability, it has no incentive to spend the additional $1000 for the flood control system, so the true probability of loss is no longer .005. B) pays the premium that is based on the .01 probability, it has no incentive to spend the additional $1000 for the flood control system, so the true probability of loss is no longer .01. C) provides for flood control, it has less incentive to spend $5000 on premiums, leaving itself underinsured. D) provides for flood control, it has less incentive to spend $10,000 on premiums, leaving itself underinsured. E) provides for flood control, it will consider that a substitute for insurance and not be able to deal with the loss from a flood should it occur.
Why does the demand curve for Japanese yen slope down?
What will be an ideal response?
Brittany decides to save $50 from each paycheck so that she can go on a Spring Break trip with her college roommates. However, when she gets paid this week, she spends all of her money on new clothes. Which of the following insights into human behavior does Brittany exhibit?
a. People are overconfident. b. People care about fairness. c. People are reluctant to change their minds. d. People are inconsistent over time.