Market consumer surplus at any quantity -- measured in dollars -- is the area above the market demand curve and below the market price
a. True
b. False
B
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The rational expectations hypothesis is a theory that states that
A) people make their economic plans by using all available past and present information and their understanding about how the economy operates. B) individuals can predict the future perfectly, at least with respect to macroeconomic variables like the interest rate and inflation. C) people make their economic plans in an irrational, intuitive manner. D) people make their economic plans by relying on the policy statements made by the President and by leaders in Congress.
Typically, a capital expenditure project will result in:
a. a cash flow stream to the firm b. a cash outflow from the firm c. an initial (one-year) outflow followed by a series of cash inflows d. for long projects, an initial five-year outflow followed by a series of cash inflows
Which of the following is not true of the statistical discrepancy in the balance of payments?
a. It is residual. b. It is a measure of net error in the balance of payments data. c. It is necessary because some transactions go unreported. d. An excess of credits in all other accounts must be offset by equivalent debits in the statistical discrepancy account. e. A difference between credits and debits is taken care of by changes in the official reserve transaction account.
The aggregate demand curve reflects:
a. a direct relationship between the price level in an economy and the real GDP demanded b. a direct relationship between real GDP demanded and total unemployment. c. an inverse relationship between the price level in an economy and the nominal GDP demanded. d. an inverse relationship between the price level in an economy and the real GDP demanded. e. an inverse relationship between the real GDP demanded and total unemployment.