When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in:
a. mechanical devices
b. specialized services
c. computer or other technologies
d. tangible and/or intangible capital
d. tangible and/or intangible capital
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Adverse selection in insurance implies that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are not risk averse d. insurers cannot tell the risk levels that different individuals face
Suppose government spending decreases by $10 billion and the marginal propensity to consume (MPC) is 0.8. Given this information, this decrease in government spending will cause a(n)
A. increase in equilibrium real GDP equal to $50 billion. B. decrease in equilibrium real GDP equal to $50 billion. C. decrease in equilibrium real GDP equal to $80 billion. D. increase in equilibrium real GDP equal to $80 billion.
What does the Coase Theorem predict?
What will be an ideal response?
Costs that have already been incurred, and which cannot be recovered, are known as
A) short-run fixed costs. B) unavoidable costs. C) sunk costs. D) implicit costs.