What does macroeconomic theory predict as the main economic effect of a reduction in the budget deficit?
a. lower real interest rates
b. a drop in the exchange rate
c. an increase in net exports
d. All of the above are correct.
d
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An example of a good that is both rival and excludable is
A) the defense services provided by a new stealth bomber. B) a pair of pants. C) a beautiful sunset. D) an uncrowded theme park such as Walt Disney World.
A point inside a production possibilities curve reflects
a. the law of increasing costs b. technological innovation c. less than full use of resources and technology d. economic efficiency e. a way to increase future economic growth
Winona's Fudge Shoppe is maximizing profits by producing 1,000 pounds of fudge per day. If Winona's fixed costs unexpectedly increase and the market price remains constant, then the short run profit-maximizing level of output
a. is less than 1,000 pounds. b. is still 1,000 pounds. c. is more than 1,000 pounds. d. becomes zero.
Assume that you are a plaintiff and have won a structured settlement from a lawsuit that entitles you to $1 million each year over the next ten years
An attorney from the defense team approaches you afterward and offers you $6 million in exchange for your settlement. How would you go about evaluating whether this is a good deal for you or not?