Which of the following is an example of a rational decision?
a. DeShawn enjoys the feeling of wind in his hair enough to ride his motorcycle without a helmet, even though he fully realizes the potential for injury it creates by not wearing one in the unlikely event he is in an accident.
b. Jayla, a burglar who breaks into houses, decides to break into the house at 265 Elm Street, rather than the house next door because the house next door has a sign in the yard that says "home protected by a security system."
c. Nicolas, a drug user, chooses to buy his cocaine from Samuel, because Samuel's cocaine is as good as the cocaine from other dealers, but Samuel has lower prices.
d. All of the above are examples of rational choices.
D
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In the period 1980-92, United States net national saving fell due to
A) large budget deficits and an increase in private saving. B) small budget deficits and a decrease in private saving. C) small budget deficits and an increase in private saving. D) large budget deficits and a decrease in private saving.
A shift to a more expansionary monetary policy will generally _________ in the short run, but if the rapid monetary expansion persists, the long-run result will be ______.(fill in the blanks.)
a. expand output and employment; inflation b. increase the general level of prices; expand output and employment c. increase the rate of unemployment; reduce the rate of inflation d. reduce the rate of inflation; increase the rate of unemployment
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
To economists, the main difference between the short run and the long run is that:
A. the law of diminishing returns applies in the long run, but not in the short run. B. in the long run all resources are variable, while in the short run at least one resource is fixed. C. fixed costs are more important to decision making in the long run than they are in the short run. D. in the short run all resources are fixed, while in the long run all resources are variable.