Suppose the nominal interest rate is 5 percent, the tax rate on interest income is 30 percent, and the after-tax real interest rate is 0.8 percent. Then the inflation rate is 2.7 percent
a. True
b. False
Indicate whether the statement is true or false
True
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For goods on which a relatively small portion of income is expended, _____
a. income effects will be small relative to substitution effects b. income effects will be large relative to substitution effects c. income effects will be about the same as substitution effects d. there will be no income effects.
Why does the supply curve of the perfectly competitive industry shift to the right whenever a new firm enters the industry?
What will be an ideal response?
Which of the following is a possible budget reform?
a. a quarterly budget b. adding more line items to the budget c. a biennial budget d. none of the above would reform the budget process
Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice.
Which of the following statements is true?
A. Jordan does not have a dominant strategy. B. Jordon's dominant strategy depends on Lee's choice. C. For Jordan, seeing a documentary is a dominant strategy. D. For Jordan, seeing a comedy is a dominant strategy.