A hypothesis states that religious teachings, family ties, and/or social norms are the root cause of economic prosperity. According to this hypothesis:
A) culture is a proximate cause of prosperity.
B) geography is a fundamental cause of prosperity.
C) institutions is a fundamental cause of prosperity.
D) culture is a fundamental cause of prosperity.
D
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The rational expectations hypothesis suggests that
A) unanticipated fiscal policy actions are more powerful than monetary policy actions. B) fiscal policy actions only work when accompanied by changes in the money supply. C) anticipated monetary policy actions are more powerful than fiscal policy actions. D) anticipated fiscal and monetary policy actions are not likely to achieve their stated aims.
Referring to the previous question, all else constant, a one unit increase in the price of good Y would cause the quantity demanded of good X to:
A) decrease by 2 units. B) increase by 2 units. C) decrease by 1 unit. D) decrease by 5 units.
Lenders in the shadow banking system
A) are protected from loss by the FDIC. B) lack insurance to protect them from loss if the borrower becomes insolvent. C) are not subject to the bank runs or panics that can affect commercial banks. D) are protected by the Federal Reserve and the U.S. Treasury Department should they suffer losses due to bad investment decisions.
Resale is difficult when
A) the good is light-weight. B) the good is expensive. C) transaction costs are high. D) transaction costs are negligible.