Explain why each of the following is considered an economic issue:
a. whether to spend Saturday afternoon at a football game
b. obtaining tickets to a U2 concert
c. your university considers your application for one of 25 available scholarships
Each of the following are economic issues that illustrate scarcity and the necessity of making choices:
a. The decision as to whether to spend Saturday afternoon at a football game involves weighing the marginal expected benefit versus the marginal expectedcost. There is an opportunity cost associated with going to the football game since you could spend the time in other ways, such as studying or working.
b. Attending a U2 concert requires a sacrifice of both money and time. Individuals face a tradeoff between what could be done with the time and the dollars expended acquiring tickets and attending the concert.
c. Since there are a limited number of scholarships and many students who would wish to receive one, the university must decide to whom to allocate these scarce scholarship resources.
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If the savings rate of Country A increases from 10% to 20% and technology growth is zero, then the neoclassical model predicts that in the steady state
a. the capital-to-labor ratio will not grow in the long-run but higher than it is now. b. the capital-to-labor ratio will grow 10% faster. c. the growth rate of output will be permanently higher. d. the level of output will be permanently higher. e. a and d.
To maintain free international flows of capital and domestic monetary autonomy, in most of the world today, exchange rates are __________ . One of the major exceptions is ___________
Fill in the blank(s) with the appropriate word(s).
Recessions occur at regular intervals and are possible to predict with much accuracy.
a. true b. false
When a bank has no excess reserves, and thus can make no more loans, it is said to be
A. bankrupt. B. in receivership. C. loaned up. D. ripe for a takeover.