An increase in the price of capital goods will
A. reduce the expected future marginal product of capital.
B. increase the expected future marginal product of capital.
C. increase the interest cost and the depreciation cost of capital.
D. increase the interest cost but not affect the depreciation cost of capital.
Answer: C
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Which of the following is most likely to increase the incentive to invest, produce, and employ others?
a. an increase in government expenditures to provide subsidies for large banks that made bad investment decisions b. an increase in government expenditures that changes the composition of aggregate demand c. a reduction in tax rates d. an increase in payments to unemployed workers financed by borrowing
If price is on the vertical axis and quantity demanded is on the horizontal axis, why is a demand curve downward sloping (left to right)?
A) Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and supply, ceteris paribus. B) Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and quantity supplied, ceteris paribus. C) Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and demand, ceteris paribus. D) Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and demand, ceteris paribus. E) Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus.
A large public debt will not bankrupt the federal government because it can refinance the debt or increase taxes to pay it.
Answer the following statement true (T) or false (F)
The lemons problem is a situation of
A) perfect competition. B) asymmetric information. C) price discrimination. D) a natural monopoly.