Open market operations by the Fed cause
A. aggregate supply to change.
B. the prices of bonds to change.
C. changes in the required reserve ratio.
D. changes in the difference between the discount rate. and the federal funds rate.
Answer: B
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Suppose employees pay a bond of $1,000 to an employer. The gain from shirking is $400. Monitoring devices have been installed so that there is a 50% chance of being caught if you are shirking
The company is considering the installation of additional monitoring devices to increase the chance of catching a shirker to 100%. They feel this is needed to deter all shirking. What is your recommendation to the company? Explain.
The command system relies on prices set by firms on the basis of consumer demands
a. True b. False Indicate whether the statement is true or false
The view that individuals weigh all available evidence when they formulate their expectations about economic events (including information concerning the probable effects of current and future economic policy) is called
a. the adaptive expectations hypothesis. b. the permanent income hypothesis. c. the rational expectations hypothesis. d. the Phillips curve.
When computing the opportunity cost of attending a basketball game you should include
a. the price you pay for the ticket and the value of your time. b. the price you pay for the ticket, but not the value of your time. c. the value of your time, but not the price you pay for the ticket. d. neither the price of the ticket nor the value of your time.