Suppose that in 2016, all prices in the economy double and that all wages and salaries also double. In 2016 you
A) are no better off or worse off than you were in 2015 as the purchasing power of your salary has remained the same.
B) are better off than you were in 2015 as your salary is higher than it was in 2015 and you can now buy more goods and services.
C) are worse off than you were in 2015 as you can no longer afford to buy as many goods and services.
D) cannot determine whether you are better off or worse off than you were in 2015, because the purchasing power of your salary cannot be determined.
A
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Moral hazard occurs when an agreement encourages undesirable behavior
Indicate whether the statement is true or false
Since 1974, commercial banks importance as a source of funds for nonfinancial borrowers
A) has shrunk dramatically, from around 40 percent of total credit advanced to around 25 percent by 2014. B) has shrunk dramatically, from around 70 percent of total credit advanced to below 50 percent by 2014. C) has expanded dramatically, from around 50 percent of total credit advanced to above 70 percent by 2014. D) has expanded dramatically, from around 30 percent of total credit advanced to above 50 percent by 2014.
If the economy is suffering a recession, inventories are probably falling.
Answer the following statement true (T) or false (F)
Why do economists use the concept of elasticity in addition to measurement of the slope of the demand curve?
a. Mathematical equations are favored over graphical analysis. b. Elasticities are independent of the units of measure. c. The concept of elasticity can be used in other areas of economics, whereas the slope of the demand curve is only useful in demand analysis. d. These terms are interchangeable, but elasticity has the more professional sound.