The high-school dropout rate typically declines during a recession because
A) more money flows into the public sector as the flow declines in the private sector.
B) teachers become more readily available during a recession.
C) the opportunity cost of continuing in school falls in a recession.
D) the demand for education rises in a recession.
E) the legal school-leaving age is a function of the unemployment rate.
C
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Inferior goods are those for which demand increases as
A) the price of a substitute falls. B) the price of a substitute rises. C) income decreases. D) income increases.
Which statement is false?
A. Foreigners own a much greater percentage of the assets in the U.S. then they did in the early 1980s. B. Americans have assets of over $1 trillion in foreign countries. C. The dollar value of assets held by Americans in foreign countries has been declining since 1985. D. None of these statements are false.
Explain how each of the following events would affect the supply of loanable funds curve:
a. The economy is in a recession so people's disposable income is lower. b. The stock market is booming so people's wealth is higher. c. The future looks a bit more grim, so expected future income is lower. d. The real interest rate increases.
Which of the following will decrease the natural rate of interest?
A) An increase in taxes B) An increase in investment spending C) A decrease in inflationary expectations D) An increase in the money supply