If future benefits are underestimated by a firm,
A. the firm will invest too much in capital.
B. the firm will only sell bonds to invest in capital.
C. the firm will invest too little in capital.
D. the firm will use only retained earnings to invest in capital.
Answer: C
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Given the data in Table 6.1, if the workers who are "not employed and not looking for work" were counted as not employed and in the labor force, the unemployment rate of Metropolis would be approximately
A) 4 percent. B) 7 percent. C) 9 percent. D) 10 percent.
A positive cross price elasticity of demand between two goods suggests that the goods are
A) not related. B) complements. C) substitutes. D) both of unitary elasticity.
Contractionary fiscal policy would be most effective in decreasing inflation when
a. the marginal propensity to consume low. b. investment spending is insensitive to interest rates. c. the economy has a high marginal tax rate. d. investment spending is sensitive to interest rates.
The oligopolistic model in which firms produce exactly the same results as would exist if a monopolist controlled the entire industry is called the ________ model.
A. price leadership B. Cournot C. collusion D. maximin strategy