The consumption function will shift upward if real asset and money holdings:
a. increase, if people expect prices to increase, if interest rates decrease, and if taxes decrease.
b. increase, if people expect prices to increase, if interest rates increase, and if taxes increase.
c. increase, if people expect prices to increase, if interest rates increase, and if taxes decrease.
d. decrease, if people expect prices to decrease, if interest rates decrease, and if taxes decrease.
e. decrease, if people expect prices to increase, if interest rates increase, and if taxes decrease.
a
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Investments that are specific to a relationship (i.e. of lower value elsewhere) are considered risky and require:
a. an enforceable contract. b. an efficient spot market. c. high rates of return. d. verbal commitments.
Overall, professional securities analysts have a 75% success rate in predicting winning stocks
a. True b. False Indicate whether the statement is true or false
Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.
The firm depicted in the graph on the right faces a demand curve that is:
A. the same as the marginal cost curve. B. the same as the market demand curve. C. horizontal at the market price. D. less than the market demand curve.