Compared to the pay increase from just a third year of college, the actual pay increase resulting from a fourth year that results in graduation is
a. several times smaller
b. the same
c. only very slightly greater
d. several times greater
e. No economist has ever studied this issue
D
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The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time sells $10 billion worth of bonds, then by how much does the money supply change?
a. It falls by $20 billion. b. It falls by $110 billion. c. It falls by $180 billion. d. None of the above is correct.
According to marginal analysis, you should choose to do something if the extra benefit:
A. is positive. B. outweighs the extra cost. C. exceeds the benefits of the previous time spent on the activity. D. will change the outcome.
A natural monopoly arises when:
A. economies of scale are so great that only one firm can exist in a market. B. a firm acquires a patent. C. two firms merge to become the only firm serving an entire market. D. a single firm controls all of a natural resource.
Assume the interest parity condition holds and that individuals expect the dollar to appreciate by 5% during the coming year. Given this information, we know that
A) the interest rate differential between the two countries is less than 5%. B) i < i. C) i = i. D) individuals will only hold foreign bonds. E) none of the above