Along any downward sloping straight-line demand curve:
A) both the price elasticity and slope vary.
B) the price elasticity varies, but the slope is constant.
C) the slope varies, but the price elasticity is constant.
D) both the price elasticity and slope are constant.
B
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If the MPS is one-third, a $100 increase in net exports will
A) reduce real Gross Domestic Product (GDP) by $300. B) reduce real Gross Domestic Product (GDP) by $100. C) increase real Gross Domestic Product (GDP) by $300. D) increase real Gross Domestic Product (GDP) by $33.
Default risk arises from the fact that
A) borrowers differ in their ability to repay in full the principal and interest required by a loan agreement. B) the bond price drops when interest rates rise. C) it is inherently riskier to wait for a capital gain than to receive an immediate interest payment. D) interest rates are far more likely to go up than to go down.
Which of the following is not an incentive bureaucrats have to increase the size of their budgets?
a. They can increase their income by having a higher budget. b. Increased budgets mean more power and prestige. c. Higher budgets are necessary to maximize scale efficiencies. d. A nice working environment is positively correlated with a higher budget.
The preferences between baskets of outcomes when the state of the world is not yet known are called
a. ex ante preferences. b. ex post preferences. c. risk-averse preferences. d. diversified preferences.