If other factors are held constant, what happens when the federal government finances a growing budget deficit by increasing the amount it borrows from the private sector?
A) There will be an increase in the interest rate.
B) There will be a decrease in the interest rate.
C) The crowding out effect will be cancelled out.
D) There will be an increase in net exports.
Answer: A) There will be an increase in the interest rate.
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Which of the following is true about an individual's choice of insurance assuming state-independent tastes?
A. Full insurance will be chosen from a full menu of actuarily fair insurance if tastes are risk averse. B. No insurance will be chosen if the menu of insurance contracts is actuarily unfair and tastes are risk averse. C. No insurance will be chosen if the menu of insurance contracts is actuarily unfair and tastes are risk-neutral. D. (a) and (b) are true. E. (a) and (c) are true. F. (b) and (c) are true. G. All of the above. H. None of the above
Refer to Figure 28-9. Fed Chairman Paul Volcker's response to high inflation of the late 1970s is depicted in the figure above as a movement from
A) A to D to C. B) A to B to C. C) C to E to B. D) C to D to A. E) C to B to A.
If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,
a. the firm should not hire the 6th worker as MB
Which of the following does NOT contribute to an increase in productivity?
A.) Technological advances. B.) High quality of capital. C.) High quantity of labor. D.) Highly skilled labor.