The most basic concepts on which the social science of economics rests are
a. consumers and producers.
b. money, interest rates, and exchange rates.
c. supply and demand.
d. scarcity and choice.
d. scarcity and choice.
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Suppose your expenses for this term are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500
Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? A) $5,500 B) $8,500 C) $11,500 D) $14,500
The banking system currently has $10 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time buys $1 billion worth of bonds, then by how much does the money supply change?
a. It falls by $12 billion. b. It falls by $19 billion. c. It falls by $21 billion. d. None of the above is correct.
Economists who believe the supply-side effects of tax cuts are small essentially believe that
A) tax cuts mainly affect aggregate demand. B) tax cuts mainly affect aggregate supply. C) tax cuts will increase the quantity of labor supplied. D) tax cuts will result in relatively small changes in the price level.
Which of the following is an important real consequence of the public debt of the United States?
A. It will threaten to bankrupt the Federal government B. It discourages saving among the general public C. It decreases the inequality in the distribution of income in the U.S. D. Its consequent higher interest rates lead to fewer incentives to bear risk and innovate