We consider the preferences of the consumer because
A) we want to understand the consumer's reaction to changing circumstances.
B) we want to determine the best marketing strategy.
C) the government wants to make the best consumption and leisure choice.
D) the firm needs to determine what to produce.
A
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In the Keynesian model, a $1 billion increase in autonomous consumption leads to ________ in equilibrium output.
A. no change B. a greater than $1 billion increase C. a $1 billion decrease D. a $1 billion increase
The principal-agent problem
A) occurs when managers have more incentive to maximize profits than the stockholders-owners do. B) in financial markets helps to explain why equity is a relatively important source of finance for American business. C) would not arise if the owners of the firm had complete information about the activities of the managers. D) explains why direct finance is more important than indirect finance as a source of business finance.
You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3: receive $2,000 five years from now. The interest rate is 15 percent. Rank these three options from highest present value to lowest present value
a. Option 1; Option 2; Option 3 b. Option 3; Option 2; Option 1 c. Option 2; Option 3; Option 1 d. Option 3; Option 1; Option 2
The majority of the poor are
A. Hispanic. B. white, non-Hispanic. C. black, non-Hispanic. D. no one ethnic group makes up the majority.