In the base year the price index
A. will always equal 100.
B. will equal the year.
C. equals 100 times the cost of the market basket in the base year.
D. will be between 1 and 100.
Answer: A
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Over time, the money multiplier:
A. was relatively stable until 2008, when it dropped dramatically. B. was relatively stable until 2008, when it rose dramatically. C. has historically followed the business cycle. D. runs counter cyclic to the business cycle.
In the late summer of 2005 some regions of the country were suffering from drought. What effect would we expect this to have on the stock of companies such as John Deere that manufacture farm equipment?
a. raise the demand for existing shares of the stock, causing the price to rise b. decrease the demand for existing shares of the stock, causing the price to fall c. raise the supply of the existing shares of stock, causing the price to rise d. raise the supply of the existing shares of stock, causing the price to fall
The marginal rate of technical substitution is
A. the slope of the isocost curve. B. the rate at which the firm can substitute labor for capital while holding total cost constant. C. the rate at which the firm can substitute labor for capital while holding output constant. D. both a and c E. none of the above
When your broker sees that you are in danger of running through your money and forces you to sell your stock and use the money to pay back your loan, he is making a:
A. margin call. B. stock sales call. C. futures call. D. leverage call.