In economics, transaction costs refer to the
a. time, effort, and other resources needed to search out and negotiate an exchange.
b. dollar cost or price of the item traded.
c. cost an economy suffers when it allows specialization according to comparative advantage.
d. amount by which the price of an item increases due to the presence of a middleman.
A
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During the 2008-09 recession, the U-6 measure of the unemployment rate
A) which counts marginally attached workers and discouraged workers as unemployed, reached 17 percent. B) which counts marginally attached workers and discouraged workers as employed, reached 10 percent. C) which counts marginally attached workers as unemployed but does not count discouraged workers as unemployed, reached 17 percent. D) which counts all part time workers as employed, reached 12 percent. E) which counts discouraged workers as unemployed but does not count marginally attached workers as unemployed, reached 17 percent.
Which of the following is not a limitation a person faces when shopping for clothes?
a. The amount of time available to shop b. The person's budget c. The various styles that are available d. The selection of stores e. The freedom to make rational choices
The Paradox of Financial Innovation states that:
a. What once was thought of as a "financial innovation" is really just old wine in a new bottle (i.e., nothing new). b.When a single firm, in isolation, tries to de-lever its balance sheet, the net effect is often for its leverage to rise. c. Financial innovation is a puzzle (i.e., a paradox) and always will be. d. When a large portion of the market tries to de-lever its balance sheet, asset prices fall, thereby causing leverage to increase (not decrease). e. If not fully understood by users and regulators, financial instruments that were created to reduce risk can end up increasing them.
Assume the economy faces high unemployment but stable prices. Which combination of government policies is most likely to reduce unemployment?
a. The purchase of government securities in the open market and an increase in taxes b. The sale of government securities in the open market and a decrease in taxes c. The sale of government securities in the open market and a decrease in government spending d. The purchase of government securities in the open market and an increase in government spending