In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together
B) all loans in the economy are transacted at a common interest rate
C) the level of output is not affected by changes in the real interest rate
D) an increase in inflation leads to a decrease in the real interest rate
A
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Excise taxes constitute a large source of government revenue
a. True b. False
If differentiation makes the market demand curve less elastic, then
A) consumer surplus increases. B) the market structure changes into a monopoly. C) price markup over marginal cost is lower than when products are identical. D) price markup over marginal cost is higher than when products are identical.
The following is an example of risk aversion
a. those applying for a well-paid job tend to be unqualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is the most qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
Using the income approach, an estimate of the value of capital worn out producing GDP is:
a. indirect business taxes. b. capital consumption allowance or depreciation. c. gross private domestic investment. d. capital erosion estimate.