When the economy is going strong:
A. GDP growth is negative.
B. demand for workers decreases.
C. firms expand their operations.
D. firms tend to lay off workers.
Answer: C
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What is the largest component of the federal budget?
A) discretionary spending B) entitlements and mandatory spending C) defense spending D) net interest
Answer the following statements true (T) or false (F)
1. Price elasticity of demand tends to be greater for substitute items than for complementary goods. 2. If income increases and the demand for a product increases, the product is a normal good. 3. The more substitutes for a good, the more elastic its demand tends to be. 4. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future. 5. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
A decrease in the liquidity of corporate bonds will ________ the yield of corporate bonds and ________ the yield of Treasury bonds, everything else held constant
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
In Figure 16-2 above, the line BF is
A) the MPK less the user cost of capital. B) the user cost of capital less MPK. C) the MPK. D) the demarcation line for profitability.