If you think that the economy is entering a recession, and fear that you might lose your job, explain how your actions of lowering your consumption level might actually increase the probability that you do lose your job
This relates to the paradox of thrift. If you think your future income might fall, then you will reduce your
consumption expenditure. But, if many people react this way, the decrease in consumption expenditure
leads to a lower national income equilibrium. A lower national income level means fewer employment
opportunities. As jobs disappear, the probability that yours will be one of them increases.
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In Figure 4-5 above, people would be trying to increase their holdings of money at
A) points A and E. B) points B, E, and C. C) point A. D) points A and B. E) point D.
Which two pieces of legislation were passed in 1914?
a. Sherman Antitrust and Clayton Act b. Clayton Act and Robinson-Patman Act c. Robinson-Patman Act and Celler-Kefauver Act d. Clayton Act and Federal Trade Commission Act e. Sherman Antitrust Act and Federal Trade Commission Act.
Which of the following is true? a. When real interest rates are higher in country A than country B there will tend to be a capital flow from country B to country A. b. When real interest rates are higher in country A than country B there will tend to be a capital flow from country A to country B. c. Capital flows will tend to increase real interest rates in countries with a capital inflow
d. Both b. and c. are correct.
Stockholders of a corporation can be regarded as entrepreneurs because they
a. are ultimately the ones who hire or fire managers b. take the risks associated with corporate enterprise c. are compensated for the opportunity costs they incur when they invest their capital in the corporation d. are involved in the major management operations of the corporation e. invest their time and effort in managing the corporation