Active policy making would include all of the following EXCEPT
A) interest rate changes by the Fed.
B) tax increases.
C) unemployment insurance benefits.
D) increased government spending by the Congress.
Answer: C) unemployment insurance benefits.
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Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 3 hours per day
If he is following the marginal principle, what must his marginal cost per hour be? A) $24 B) $32 C) $40 D) $48
When Fed policy is being used to offset an inflationary gap, which of the following variables increases as a result? a. Aggregate demand. b. Investment
c. Net Exports. d. Interest rates.
Barriers to entry into a market could include all of the following, except one. Which is the exception?
a. government restrictions b. brand loyalty c. large marginal costs d. licensing fees e. large fixed costs
The "miracle of compound interest" is best described by which of the following?
A) Interest is paid on any currency held in your pockets. B) Interest is paid on the prior interest earned, but not the principal. C) Interest is paid only on the original principal deposited in an account. D) Interest is paid on the principal plus the prior interest earned