Which of the following events could result in the consumption function shifting from CF0 to CF1?
A) a decrease in wealth
B) an increase in expected future income
C) a decrease in disposable income
D) an increase in disposable income
E) an increase in the real interest rate
B
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As the expected future spot rate moves closer to the spot rate, uncovered interest parity indicates that:
a. interest rates should remain constant. b. interest rates should converge. c. interest rates should diverge. d. The answer depends on whether the expected future spot rate is higher or lower than the spot rate.
Rent control has become less common because it
a. caused housing shortages b. caused housing surpluses c. encouraged the black market d. led to rationing
Recall the Application about the 1998 merger between Pennzoil and Quaker State to answer the following question(s). The merger resulted in a company with a market share of 38 percent: 29 percent from Pennzoil and 9 percent from Quaker State.Recall the Application. A recent study looked at the merger between Pennzoil Motor Oils and Quaker State Motor Oils, plus four other mergers. Their study found that after the mergers, the price of their products only slightly increased. This modest increase surprised:
A. those who expected the price to rise by a lot because of increased concentration. B. those who expected to price to decrease because of increased efficiency. C. those who expected the price to decrease because of increased government regulations. D. those who expected the price to rise by a lot because of increased concentration and those who expected to price to decrease because of increased efficiency are correct.
President Reagan often stated he preferred supply side policies. Which of the following federal government policies would be considered supply side?
i. decrease the quantity of money ii. lower taxes iii. lower the interest rate A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii