The rules and principles of economics that serve as a guide for action are known as
a. economic policy.
b. economic theory.
c. macroeconomics.
d. microeconomics.
b. economic theory.
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If the yield curve is flat for short maturities and then slopes downward for longer maturities, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting
A) a rise in short-term interest rates in the near future and a decline further out in the future. B) constant short-term interest rates in the near future and a decline further out in the future. C) a decline in short-term interest rates in the near future and a rise further out in the future. D) a decline in short-term interest rates in the near future and an even steeper decline further out in the future.
In a sealed-bid, second-price auction, you should bid
A) your estimate of what others value the good at. B) one dollar more than your estimate of what the second-highest bid will be. C) your highest value. D) the common value of the good.
The long-run aggregate supply curve at potential national income is analogous to:
a. the short-run aggregate demand curve at potential national income. b. the long-run Phillips curve at the natural rate of unemployment. c. the long-run aggregate demand curve at each price level. d. the short-run Phillips curve at the natural rate of unemployment. e. the horizontal portion of the Phillips curve.
Rapid population growth leads to age dependency which refers to:
a. a reduction in the amount of capital per worker, which lowers the productivity of labor. b. shifts in government expenditures from the country's infrastructure to education and health care. c. a large number of dependent children whose consumption requirements lower the ability of the economy to save. d. high mortality rates of middle-aged workers that reduces the average amount of investment spending. e. survival of the elderly who are dependent on government welfare support.