The expected level of shirking or opportunistic behavior by an agent:
A. is always zero.
B. is always less than zero.
C. can always be determined accurately.
D. is always greater than zero.
Answer: D
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The area between the market price and the demand curve provides a measure of: a. consumer surplus
b. producer surplus. c. consumer surplus plus producer surplus. d. marginal utility.
In an oligopoly, advertising: a. allows a firm to sell any quantity it wishes
b. shapes consumers' preferences. c. shapes perceived demand for a price taker. d. allows a firm to raise the prevailing market price.
In the case of a currency union, what is a nominal anchor?
A) It is the weight of the efficiency loss from changing to a common currency. B) It is an independent value, such as the value of the common currency unit, constraining the ability of a nation to inflate its currency and prices. C) It is a nominal measure of GDP that is not the same as the measure for real GDP. D) It links that nation to other members of the currency union and permits no trade or financial relationships outside the union.
The main idea behind using fiscal policy to combat a recession is:
A. the government will make up for the decreased saving in the economy, preventing a downward spiral. B. the government will supplement the increased saving in the economy, contributing to an upward spiral. C. the government will make up for the decreased spending in the economy, preventing a downward spiral. D. the government will supplement the increased spending in the economy, contributing to an upward spiral.