Use the following information to answer the next question.C = A + .75(Y - T)A = $900I = $600G = $400T = $400NX = -$200If the full-employment level of real GDP is $6,000, at the equilibrium level of real GDP, there is ________.
A. a recessionary expenditure gap of $100
B. an inflationary output gap of $400
C. a recessionary expenditure gap of $400
D. an inflationary output gap of $100
Answer: A
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Sarah initially used her cell phone mostly to make important business calls
However, when she was informed that henceforth her phone bills would be reimbursed by her employer, she started using her cell phone to make frequent calls to her friends and relatives. This behavior is an example of ________. A) moral hazard B) a negative externality C) the prisoners' dilemma D) the free-rider problem
Consider the perfectly competitive firm in the above figure. What will the firm choose to do in the short-run and why?
A) shut down because the firm incurs an economic loss B) stay in business because the firm is making an economic profit C) stay in business because the firm's economic loss is less than fixed costs D) stay in business because it is making zero economic profit
The __________ the price of the underlying stock, the __________ the call option premium will be
A) higher; lower B) lower; higher C) lower; lower D) None of the above.
Ronald Coase argued that firms exist due to the presence of
A) transfer costs. B) unions. C) transactions costs. D) easy market transactions.