A rise in the interest rate will generally result in people consuming more when they are old if the substitution effect outweighs the income effect
a. True
b. False
Indicate whether the statement is true or false
True
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A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid
A) if the United States is producing at a point on its production possibilities frontier. B) if the United States is producing at a point inside its production possibilities frontier. C) if the United States is producing at a point beyond its production possibilities frontier. D) only if the production possibilities frontier shifts rightward.
Automatic stabilization occurs
A) when the Congress makes changes to transfer payment programs. B) because monetary policy is effective. C) because government purchases fluctuate with real GDP. D) because taxes and transfer payments fluctuate with real GDP.
Suppose that you decide to purchase either stocks or bonds of a particular corporation and you also prefer to receive some returns from the securities every year. Which should you buy - stocks or bonds? Why?
What will be an ideal response?
Economics is the study of
A. how people allocate their limited resources to satisfy their unlimited wants. B. the way people think rather than the way they act. C. how to own as many resources as possible. D. ceteris paribus.