The level of household debt incurred over the two decades leading up to the 2008 crisis was only sustainable if interest rates:
A. remained low and housing prices remained high.
B. and housing prices both remained high.
C. and housing prices both remained low.
D. remained high and housing prices remained low.
A. remained low and housing prices remained high.
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A firm in short-run equilibrium always earns positive profits if
a. AC > P > AVC. b. AR > AC. c. MR = MC. d. AC > MC.
Bigness, or large firms, may benefit consumers in which of the following ways?
A. Larger firms usually charge lower prices than smaller firms. B. Larger firms with monopoly power definitely have greater incentive to be efficient and innovative. C. Larger firms may take advantage of economies of scale and scope. D. Larger firms are more responsive to consumers’ desires.
If a bank has $100 million in assets and a net worth of $10 million, its debt-to-equity ratio is:
A. 10 to 1. B. 0.1 to 1. C. 9 to 1. D. 5 to 1.
Refer to the above diagram. Assume that G and T1 are the relevant curves, the economy is currently at A, and the full-employment GDP is B. This economy has a(n):
A. cyclically adjusted budget surplus. B. actual budget deficit. C. actual budget surplus. D. cyclically adjusted budget deficit.