Assume that prices have risen in a given economy by an average of 5 percent over the last nine years. If consumers base their expectations about future price movements on that knowledge alone their forecasts rely on ________
A) reverse expectations
B) adaptive expectations
C) rational expectations
D) monetary expectations
B
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The figure above illustrates a linear demand curve. By comparing the price elasticity in the $2 to $4 price range with the elasticity in the $8 to $10 range, you can conclude that the elasticity is
A) greater in the $8 to $10 range. B) greater in the $2 to $4 range. C) the same in both price ranges. D) greater in the $8 to $10 range when the price rises but greater in the $2 to $4 range when the price falls.
Given the budget line in the figure above, the combination of chips that is NOT affordable is
A) a. B) b. C) c. D) d.
Suppose that Big-Cat and Fat-Cat are rival cat food brands, and the price of Fat-Cat is reduced. Following this price drop, is there a shortage or a surplus of Big-Cat at the old price of Big-Cat?
a. Surplus. b. Neither, a price drop can not cause a shortage or surplus. c. Neither, equilibrium exists. d. Shortage.
A fund in which moneys are set aside either in preset amounts or on a variable basis is referred to as a
a. sinking fund b. serial bond c. common bond d. convertible bond e. mutual fund