A government-imposed price ceiling has what effect on efficiency?
A. Consumer and producer surplus increases.
B. Producer surplus increases.
C. There is little dead weight loss.
D. Consumer surplus increases.
Answer: D
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If the rate of inflation is 4 percent and the real interest rate is 3 percent, the nominal interest rate should be
A. 1 percent B. 4 percent C. 7 percent D. 11 percent
Since the 1970s, union membership in the U.S. has been
A) rising. B) remaining constant. C) declining. D) erratic.
As a result of moving more decision making from the periphery of the organization toward the center, typically
a. the flow of information to the decision maker that is relevant to the decision should be enhanced b. the flow of information from the decision maker that is relevant to the decision should be enhanced c. the incentive structure for the decision maker should be strengthened d. the incentive structure for the decision maker can be eliminated
Suppose a sunken ship containing $1000 in currency is dredged out of Lake Erie. The currency is still legal tender, but interest rates are high so no one wants to hold onto the currency; the owners therefore deposit it in a bank. If the reserve requirement is 20% and the banks hold no excess reserves, the eventual result will be
a) the money supply decreases by $200 b) the money supply increases by $1000 c) the money supply increases by $2000 d) the money supply increases by $5000 e) the money supply remains unchanged