Assume the government decides to decrease taxes and to finance the expected budget deficit with borrowing in the real credit market. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with demand for real credit shifting to the right.
b. Start the analysis in the real goods market with aggregate demand shifting to the left.
c. Start the analysis in the real goods market with aggregate supply shifting to the left.
d. Start the analysis in the real goods market with aggregate supply shifting to the right.
e. Start the analysis in the real credit market with demand for real credit shifting to the left.
.A
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Last year, Casey grew fresh vegetables, which she sold at her local farmers market, but this year, Casey did not plant any vegetables and went to work at a bank instead. If Casey's decision to change careers did not affect the price of vegetables at the farmers market, then this suggests that:
A. the market demand for vegetables is perfectly inelastic. B. the demand for vegetables increased this year. C. the demand for vegetables did not change. D. the market for vegetables is perfectly competitive.
Changing consumer taste and preferences, lawsuits, and competitive pressures adversely affect McDonald's sales
Indicate whether the statement is true or false
An economic policy has a decent chance of working as intended, if ________
A) the policy causes no change in expectations B) if mistaken expectations are not very costly C) the rationale behind the policy is well-understood by the public D) expectations are formed in the same way by both the public and the policymakers
Which of the following is a characteristic of a real option?
a. The call option on a stock exercised if some average of the prices of its components passes a critical level. b. The right to postpone construction on the basis of net present value calculation. c. The put option on a stock that need to be paid for (at a predetermined price) if they are actually exercised. d. The right to sell an option at the strike price.