One essential trade-off involving business risk which the market system provides is reflected in which of the following?
A. Access to the firm's profits and gains are open only to those who take on the business risk of the firm
B. Those who receive guaranteed payments from the firm are also guaranteed a share of the firm's profits
C. Those who make bad decisions regarding risk will suffer losses; those who decide wisely will gain profits
D. Those who bear the business risk of the firm are guaranteed to always gain profits
Answer: A
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According to the short-run Phillips curve, if unemployment is 2.4% and inflation is 3.7%, a decrease in the inflation rate might result in which of the following?
A) an increase in the unemployment rate to 3.4% B) a decrease in the unemployment rate to 3.0% C) a decrease in the demand for labor in the economy D) Both A and C are correct answers.
Suppose that good X has few close substitutes and that good Y has many close substitutes. Which good would you expect to have more price elastic demand?
Suppose an individual buyer values a pound of butter at $10. If the market price of butter is $8, what is the consumer surplus for this buyer?
A. $0 B. $5 C. $4 D. $2 E. $3
The problem causing most recessions is too little
A) money (currency plus checking accounts). B) spending. C) unemployment. D) taxes.