How does voluntary exchange create wealth?
What will be an ideal response?
all participating parties expect to gain something; mutually beneficial to each side
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A $100 million decrease in government expenditure on goods and services leads to an even larger decrease in aggregate demand because of
A) induced changes in consumption expenditures. B) automatic fiscal policy. C) induced changes in aggregate supply. D) discretionary fiscal policy. E) the reinforcing effect of monetary policy.
During the economic crisis of 2008, the Fed acquired the authority to
a. pay interest to commercial banks on their reserves. b. determine the size of the budget deficit or surplus of the Federal Government. c. require the Treasury to print and issue additional currency. d. purchase gold in sufficient amounts to back the U.S. dollar.
Game theory shows that cartels
a) should be expected b) allow firms to maximize joint profit c) allow firms to overcome the less desired outcome consider with the person's dilemma d) all of the above
You are a financial advisor and a client tells you he is concerned about the amount of risk in his portfolio. Assuming your client hasn't already done them, what two things can you suggest to reduce your client's risk? What additional information about reducing risk should you provide?