Households are said to have positive wealth when
A. the market value of their assets is zero.
B. the value of their assets is equal to the debts they owe.
C. the value of their assets is greater than the debts they owe.
D. the value of their assets is less than the debts they owe.
Answer: C
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In early 2000s, oil prices were rising because of concern about the Iraqi invasion Kuwait and other situations, along with rapid growth in demand in the Far East. Prices eventually reached over $100 a barrel. How would most economists predict these high prices should affect the U.S. economy in terms of the AD/AS model?
A. Because oil is an important input in many production processes, the higher prices should shift the short-run aggregate supply curve down (to the right). B. Because oil is an important input in many production processes, the higher prices should shift the short-run aggregate supply curve up (to the left). C. They do not change anything, but are evidence of a shift in the aggregated demand curve to the right. D. They would have no effect because oil prices are a microeconomic phenomenon.
A trough in the business cycle occurs when:
A. the natural rate of unemployment is at a minimum point. B. employment and output reach their lowest levels. C. cyclical unemployment is at a minimum point. D. structural and frictional unemployment are at their highest levels.
All of the following are functions of the Federal Reserve System EXCEPT
A. to supply the economy with fiduciary currency. B. to act as the government's fiscal agent. C. to provide loans to developing countries. D. to hold depository institutions' reserves.
When comparing perfect competition and monopoly, a major assumption made is that
A) the monopolist faces a downward sloping demand curve. B) consumers only care about the price of the good and not whether the seller is a monopoly or not. C) the costs of production are the same under monopoly as under perfect competition. D) the monopolist can make an above normal rate of return.