In an open market purchase, the Fed ________ government securities, which ________ bank reserves
A) buys, increases
B) buys, decreases
C) sells, increases
D) sells, decreases
A
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Which of the following will increase the natural unemployment rate?
i. a minimum wage set above the equilibrium wage rate ii. efficiency wages iii. union-negotiated wages A) i only B) i, ii and iii C) i and ii D) ii and iii only E) i and iii only
Which of the following explanations, if true, for the observation that 80% of your company's employees choose not to opt into the company's optional retirement plan would be the LEAST consistent with standard economic theory?
A. Company-sponsored retirement plans tend to have lower-than-average returns over the long run. B. Company-sponsored retirement plans tend to have higher-than-average costs compared to other retirement saving instruments. C. When confronted with alternatives, people sometimes avoid making a choice and end up with the option that is assigned as a default. D. Across all employers, the average rate of retirement plan enrollment tends to be about 20%, which is consistent with the low demand for retirement plans.
How are Treasury bond prices affected when the interest rate falls?
a. The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must decrease. b. The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must increase. c. The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must decrease. d. The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must increase.
For an economist, the idea of making assumptions is regarded generally as a
a. bad idea, since doing so leads to the omission of important ideas and variables from economic models. b. bad idea, since doing so invariably leads to data-collection problems. c. good idea, since doing so helps to simplify the complex world and make it easier to understand. d. good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand.