What would be the impact on the monetary policy reaction curve if the Fed were to raise the target inflation rate?
A. A movement up the existing monetary policy reaction curve
B. A movement down the existing monetary policy reaction curve
C. The monetary policy reaction curve shifts to the right
D. The monetary policy reaction curve shifts to the left
Answer: C
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The federal government debt equals
A) the accumulation of past budget deficits. B) tax revenues minus government spending. C) the total value of U.S. Treasury bonds outstanding. D) government spending minus tax revenues.
Adverse selection refers to the
A) use of statistical discrimination in making loans. B) possession of information by one party in a financial transaction not known by the other party. C) likelihood that a potential borrower may use the funds that he receives for unworthy, high risk projects. D) possibility that the borrower may engage in riskier behavior after the loan is obtained.
Companies are never justified in not installing all possible safety devices in their products when the omission of those safety devices could result in the loss of life to the users of the products
Indicate whether the statement is true or false
Which of the following is true?
A) Accounting profits = Revenues - Implicit costs - Explicit costs B) Economic profits = Revenues - Explicit costs C) Accounting profits = Revenues - Implicit costs D) Economic profits = Accounting profits - Implicit costs