What is the misery index? What are the economic conditions when it is low versus when it is high?
What will be an ideal response?
The misery index is a sum of the inflation and unemployment rates. When the economy is at or near full employment and inflation is not a problem, the misery index should be very low. If the economy is experiencing stagflation, the simultaneous occurrence of higher-than-normal inflation and unemployment will cause the misery index to be higher than normal.
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Assume that a 3% increase in income across the economy produces a 1% decrease in the quantity of fast food demanded. The income elasticity of demand for fast food is ________, and therefore fast food is ________
A. positive; an inferior good. B. negative; a normal good. C. positive; a normal good. D. negative; an inferior good.
"Price discriminators lose money by being nice to their customers." Is the previous statement correct or incorrect?
What will be an ideal response?
The FDIC was created in
A) 1863. B) 1913. C) 1934. D) 1991.
Refer to Scenario 5.5. Jalopy Automotive's executives,
A) if risk-neutral, would fix the flaw because it enables them to have a sure outcome. B) if risk-neutral, would fix the flaw because the cost of fixing the flaw is less than the expected cost of not fixing it. C) if risk-loving, would fix the flaw because it enables them to have a sure outcome. D) if risk-averse, would not fix the flaw because the cost of fixing the flaw is more than the expected cost of not fixing it. E) would fix the flaw regardless of their risk preference, because of the large probability of high-cost outcomes.