Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?
A. Costs and resources are vastly different in each sector.
B. The incentive system for individuals to perform efficiently are vastly different.
C. The workers themselves are really quite different types of people.
D. In both sectors individuals will try to maximize their own individual gains over the gains of others.
Answer: B
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The phrase "capital formation" is synonymous with
a. investment spending. b. buying shares of stock. c. creating mutual funds. d. purchasing financial assets.
Which of the following statements is most correct if the Fed sees no need to engage in expansionary monetary policy?
A. It will be impossible for the Fed to shrink its balance sheet. B. Eventually, the Fed will shrink its balance sheet by letting securities it holds expire. C. The Fed is likely to increase the size of its balance sheet. D. The Fed will likely shrink its balance sheet rapidly.
An economic policy is:
A. a generalization about the workings of an abstract economy. B. a physical or mental structure that significantly influences economic decisions. C. a standard people use when they determine whether a particular activity or behavior is acceptable. D. an action taken by the government to influence the course of economic events.
If an economy has a money supply of $200, a velocity of 12, and a price level of $2, the output level must be:
A. 6,000 units. B. 1,200 units. C. 600 units. D. 2,400 units.