The price of a stock will increase, ceteris paribus, when
A. Future earnings expectations decrease.
B. Terrorists cause people to be fearful.
C. Consumer confidence increases.
D. The interest rate increases.
Answer: C
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It is likely that a small increase in a country's saving rate will have
A) a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth. B) a small effect on per capita real GDP many years later because the increase in saving will be offset in later years by a decrease in the saving rate. C) a small effect on per capita real GDP many years later because the increase in saving will have very little effect on the growth rate. D) a large effect on per capita real GDP many years later because the increase in saving leads to a slightly higher rate of economic growth which has large effects over time.
Using the government as a means of redistribution generates equity at the cost of efficiency, in part because
A) the process of redistribution uses up some of society's resources. B) the process of redistribution creates new resources for society. C) redistribution creates new incentives to work for both rich and poor. D) redistribution would not take place otherwise.
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
Under which market structure is a firm's MR curve horizontal?
A. Oligopoly B. Monopolistic Competition C. Perfect Competition D. Monopoly