A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
A. cynical behavior in modern democracies.
B. a concern that people are not rational when they make decisions.
C. failing to consider the alternatives available to the government.
D. using incentives to alter behavior.
Answer: D
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Most of the investment decisions in the U.S. economy are made by
a. consumers. b. businesses. c. governmental institutions. d. international financial agencies.
The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent. What is the real interest rate?
a. 5.25 percent b. 5 percent c. 2.3 percent d. 2 percent
Which of the following is true?
A. If capital is highly mobile, fiscal policy then loses its effectiveness under a fixed exchange rate. B. Fixed exchange rates encourage countries to have different goals, priorities, and policies with respect to macroeconomic variables. C. Countries that want to have a fixed exchange-rate regime should be willing to refrain from policy changes that lead to large international capital flows. D. For a floating exchange rate to work for a country, it cannot have an inflation rate that is much above the inflation rate(s) of its primary trading partners.
"Corporate governance" refers to aspects of the corporation like:
A. decentralization of decision rights to union workers. B. the corporate tax rate. C. compensation given to the top management. D. government regulation of corporate health and safety.