Which of the following statements about the financial and real sectors is true?
A. For every real asset there is a financial asset.
B. For every financial asset there is a real asset.
C. For every real transaction there is a financial transaction.
D. For every financial transaction there is a real transaction.
Answer: C
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The curvature of the production function shows that as employment increases, the productivity of labor
A) remains positive and increases. B) remains positive but decreases. C) decreases and becomes negative. D) remains constant.
When the Federal Reserve purchases a government bond from a primary dealer, reserves in the banking system ________ and the monetary base ________, everything else held constant
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases
What phase of the business cycle immediately follows a recession?
Positive economic principles are those that:
A. predict how people will behave. B. are influenced by political ideology. C. are always correct. D. indicate how people should behave.