If an individual is a debtor, an increase in the interest rate
A. decreases current consumption.
B. has no effect on current consumption.
C. increases current consumption.
D. will either increase or decrease current consumption depending on the size of the income and substitution effects.
Answer: A
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Allocative efficiency in a market means that resources are appropriated such that
a. the additional social benefits outweigh the additional social costs b. the additional social benefits outweigh the additional private benefits c. the marginal social benefits are equal to the marginal social costs d. the marginal social benefits are greater than the marginal social costs
Direct finance includes the sale by a corporation of stocks or bonds, but does not include borrowing money from a bank
Indicate whether the statement is true or false
Legislation that benefits many individuals at the expense of a few is a natural outcome of representative democracy
a. True b. False
At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20 . Nick must be selling his danishes for
a. $2.00 each. b. $0.50 each. c. $3.50 each. d. $5.00 each.