In response to the “Great Depression 2.0,” the Obama administration responded with more tax cuts, increased federal spending, and aid to state and local governments.
Answer the following statement true (T) or false (F)
True
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Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry
A) variable costs are increasing. B) fixed costs are increasing. C) long run average total cost is decreasing. D) productivity is increasing.
By the time Paul Volcker took office as the new Federal Reserve chairman in 1979, the inflation rate exceeded 10%. By 1982 the unemployment rate soared to 9.7% and inflation was cut to 6.2%
By the end of 1986 the unemployment rate was brought down to 7% and the inflation rate was brought further down to 1.9%. Which of the following is an appropriate description of the mechanism behind the Volcker Disinflation? A) The AD curve shifted right due to the autonomous tightening of monetary policy which explains the lowering of the unemployment rate between 1982 and 1986. B) With the Federal Reserve raising interest rates, the AD curve shifted to the left lowering the equilibrium level of inflation but inducing a negative output gap, which explains the lower inflation rate between 1979 and 1982 at the cost of a higher unemployment rate over the same period. C) The LRAS curve shifted left due to the tightening of monetary policy generating a positive output gap or a negative unemployment gap which explains the lowering of the unemployment rate between 1982 and 1986. D) all of the above E) none of the above
Which one of the following statements is NOT true?
A. The classical model assumes that pure competition exists. B. The classical model assumes that no single seller of a commodity can affect its price. C. The classical model assumes that people suffer from money illusion. D. The classical model assumes that people are motivated by self-interest.
Ponzi schemes are investments in which:
A. funds are invested solely in high-risk foreign financial assets. B. all investors are guaranteed to lose money. C. investors are unknowingly paid returns from funds contributed by new investors. D. the profitability of the investments depends on whether the economy grows or is in recession.