Which of the following will decrease the natural rate of interest?
A) An increase in taxes
B) An increase in investment spending
C) A decrease in inflationary expectations
D) An increase in the money supply
B
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Refer to Figure 14.3. To maximize economic rent, the labor union will agree to wage rate:
A) W0. B) W1. C) W2. D) W3. E) none of the above
Suppose the price of a can was $5.14. In this case, to maximize its profit, the firm illustrated in the figure above would
A) increase its production and would make an economic profit. B) not change its production and would make a normal profit. C) not change its production and would make an economic profit. D) increase its production and would incur an economic loss. E) not change its production and would incur an economic loss.
Suppose the government has imposed a price floor on the market for soybeans. Which of the following events could transform the price floor from one that is not binding into one that is binding?
a. Farmers use improved, draught-resistant seeds, which lowers the cost of growing soybeans. b. The number of farmers selling soybeans decreases. c. Consumers' income increases, and soybeans are a normal good. d. The number of consumers buying soybeans increases.
?For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of adverse selection?
a. After the loan has been made, individuals become careless with their finances
b. Individuals most likely to default are the ones most likely to apply for the loan
c. Borrowers investing their loan proceeds differently than the bank requires
d. None of the above