The slope of the indifference curve between steak and lobster is always equal to the ratio of their prices
Indicate whether the statement is true or false
FALSE
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The rate of discount is best described as the rate of
A) return on physical capital after the cost of capital has been removed. B) return on financial assets after an inflation adjustment has been made. C) interest used to derive the present values of future sums. D) return on financial capital that has not been adjusted for inflation.
Government can push the unemployment rate below the natural rate only by:
A. instituting supply-side economic policies. B. producing a higher rate of inflation than people expect. C. balancing the federal budget. D. achieving zero inflation.
If ________ enters into an exchange with another party who has ________ information, there is asymmetric information and adverse selection.
A. only a seller, but not a buyer; more B. only a buyer, but not a seller; more C. a buyer or seller; an equal amount of D. a buyer or seller; more
Application of the time inconsistency problem to monetary policy suggests that, without some mechanism to ensure commitment, the
A) rate of inflation will be higher than it would be with commitment. B) level of real output will be lower than it would be with commitment. C) rate of inflation will be higher and the level of real output will be lower than they would be with commitment. D) rate of inflation and the level of real output will be higher than they would be with commitment.