Personal consumption expenditures is the smallest component of total spending
a. True
b. False
Indicate whether the statement is true or false
False
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In a __________ plan, employees may choose __________
A) defined benefit; the assets they invest in B) defined benefit; the benefits received during retirement C) defined contribution; the assets they invest in D) defined contribution; the benefits received during retirement
Consider the following:
(i) A psychologist argues, "Economists assume that people behave rationally. However, people can and often do behave irrationally. I really think economists need to consider irrational behavior if their results are going to be valid." How should the economist respond? (ii) A mathematician argues, "Economists assume that people optimize. Yet most people are incapable of doing the complex mathematics that are a matter of course in economic models. Doesn't this reduce the usefulness of economic models?" Respond to the mathematician.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. b. The GDP Price Index and reserve-related (central bank) transactions remain the same. c. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
Which of the following statements is not correct?
A. A price ceiling set at $9 would result in a surplus. B.A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. C.A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding. D. A price floor set at $11 would result in a surplus.