In the late 1990s, the stock market bubble ________ the value of Tobin's q, and caused ________ in business equipment
A) increased; underinvestment
B) increased; overinvestment
C) decreased; underinvestment
D) decreased; overinvestment
B
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Automatic stabilizers are provisions in the law which create automatic ________ in government spending or ________ in taxes when real output declines.
A. decreases; decreases B. increases; increases C. increases; decreases D. no change; no change
The unemployment rate may overestimate the true extent of unemployment if: a. many part-time employees would like to work full-time, but are unable to get the additional work. b. many people become discouraged and cease looking for work
c. people falsely claim that they are actively seeking work in order to receive unemployment benefits. d. all of the above
A newly issued bond with a face value of $8,000 and no coupon payments is priced at $7,000 . The bond will mature in one year. What is the yield on this bond?
a. $1,000 b. 12.5 percent c. 14.3 percent d. $272.73 e. It depends on the interest rate
Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $15 and the per-unit wage, w, is $5, then the average fixed cost of using 16 units of capital and 25 units of labor is:
A. $9. B. $56. C. $12. D. There is insufficient information to determine the average fixed costs.