The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Data Driven Decision Making Kroger Groceries provides store managers flexibility to determine prices for a number of popular items they carry because demand is affected primarily by local conditions that managers are more aware of. To make sure managers
use this discretion wisely, managers are rewarded with bonuses based on quarterly sales. With improvements in data collection and analysis, the "quants" in corporate headquarters can run many small experiments. Doing so allows them to understand nuanced patterns in consumer demand that had been un-noticed previously. How does this affect manager compensation?
If your income increases from $40,000 to $48,000 and your consumption increases from $35,000 to $39,000 . your marginal propensity to consume (MPC) is:
a. 0.20. b. 0.40. c. 0.50. d. 0.80. e. 1.00.
Which of the following statements is correct?
a. Buyers determine supply, and sellers determine demand. b. Buyers determine demand, and sellers determine supply. c. Buyers determine both demand and supply. d. Sellers determine both demand and supply.
Which of the following is not a concern about nudge policies?
A. It is unclear that government knows best. B. Designing helpful policies is complicated. C. Nudge policy is not strong enough to have much of an effect. D. Very few policies meet the criterion of libertarian paternalism.