Economists assume that people are motivated by
A) a desire to please others.
B) the interests of the community at large.
C) self-interest.
D) morally correct behavior.
Answer: C
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An advantage of a swap over futures and options is that
A) they can be written for long periods. B) they are more liquid. C) they carry less default risk. D) there is no need to assess the creditworthiness of participants.
Which of the following goods is both excludable and rival in consumption?
a. a wristwatch b. fire protection in a small town c. fish in the ocean d. efforts to fight poverty
What is the total impact on aggregate demand because of a fiscal stimulus?
A. The amount of the initial increase in government spending B. The changes in consumer spending, but not the change in government spending C. The initial injection plus all subsequent increases in consumer spending triggered by the stimulus D. The initial injection plus the consumption increase in the first round
Assume the price of Advil increases. As a result, you decrease the quantity of Advil purchased each month and purchase more Tylenol. This is an example of the:
A. income effect. B. utility effect. C. consumption effect. D. substitution effect.