If one fails to account for implicit costs in decision making, then applying the cost-benefit rule will be flawed because:
A. the benefits will be overstated.
B. the benefits will be understated.
C. the costs will be overstated.
D. the costs will be understated.
Answer: D
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Which of the following best describes the capture theory of regulation?
i. Regulation seeks an efficient use of resources. ii. Regulation is aimed at keeping prices as low as possible. iii. Regulation helps firms maximize economic profit. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
In the figure above, suppose the original budget line is BD. A fall in the price of a compact disc will
A) rotate the budget line to AD. B) rotate the budget line to CD. C) not move the budget line. D) result in a parallel leftward shift of the budget line.
The figure above shows Sam's budget line. Which of the following would result in Sam's budget line rotating outward and not changing its horizontal intercept?
A) a fall in the price of a pound of coffee B) a rise in the price of a pound of coffee C) a fall in the price of a gallon of gasoline D) a rise in the price of a gallon of gasoline
Discuss what happens to the monetary policy reaction curve if the Fed were to lower their inflation target and why?
What will be an ideal response?