If long-run economic growth is not accompanied by a change in aggregate demand, the result will be
A) persistent inflation.
B) secular deflation.
C) devaluation of the dollar.
D) appreciation of the dollar.
B
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According to this Application, why did the recent decrease in oil prices have only a modest effect on economic growth?
A) Consumers may have saved the money that resulted from lower gasoline prices. B) There was less incentive to produce energy and invest in new capital and equipment. C) Government spending decreased significantly. D) Both A and B are correct.
Which of the following entities can diversify risk?
A. Individuals B. Corporations C. Insurance companies D. All of these entities can diversify risk.
At an interest rate of 6 percent, if an investment project was expected to yield $1,000 per year (to be received at year end) for each of the next three years, profit-maximizing decision makers would undertake the project only as long as the cost remained less than
a. $1,000. b. $2,577. c. $2,673. d. $3,000.
The distinction between exogenous and endogenous variables is important because:
a. Endogenous variables are fixed by definition. b. Exogenous variables are fixed by definition. c. Endogenous variables are determined within the Three-Sector-Model while exogenous variables are not. Endogenous variables are therefore treated as shocks to the Three-Sector-Model. d. Endogenous variables are determined within the Three-Sector-Model while exogenous variables are not. Exogenous variables are therefore treated as shocks to the Three-Sector-Model. e. Exogenous variables are determined within the Three-Sector-Model while endogenous variables are not. Endogenous variables are therefore treated as shocks to the three markets.