Futures markets and derivatives contribute to economic growth by:
A. increasing the risk-taking capacity of the economy.
B. deterring the transfer of risk.
C. decreasing speculation.
D. forcing people to accept the risk their decisions create.
Answer: A
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Refer to Figure 9.1. Assume the economy is initially at point A. The initial change from a shock that increases investment expenditure is best represented by which short-run equilibrium combination of price level and real GDP?
A) P2; Y2 B) P3; Y2 C) P1; Y2 D) P2; Y1
The two-period dynamic monopoly model is more useful than the static monopoly model in analyzing monopoly behavior when
A) the product produced requires a bandwagon effect. B) the product produced generates a positive network externality. C) the monopoly initially uses a lower introductory price. D) All of the above situations.
According to Ricardian equivalence, taxation and government borrowing have the same effect on spending in the private sector
a. True b. False Indicate whether the statement is true or false
Which of the following would cause the labor demand curve to shift to the right?
A) a decrease in demand for the product the labor is used to produce B) an increase in labor productivity C) a decrease in the price of a complimentary resource D) a decrease in output price