If the amount of lemonade purchased and the outdoor temperature are directly related, then
A. when temperature rises, the amount of lemonade purchased rises.
B. a graph with this relationship would be negatively sloped.
C. sellers of lemonade hope for cooler temperatures.
D. the slope of the line reflecting this relationship will be 0.
Answer: A
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Refer to the table below. Martha's opportunity cost of making of a pie is: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. 3/4 of a cake. B. 80 cakes. C. 8 cakes. D. 4/3 of a cake.
In an open economy with floating exchange rates, monetary policy is most effective at increasing real income if
A) capital mobility is high. B) capital mobility is low. C) capital mobility is perfect. D) monetary policy is ineffective with floating exchange rates.
The notion that the central bank should set its federal funds target by a formula that puts weight on both output and inflation gaps is known as ________
A) the Taylor rule B) the constant growth rate rule for money C) the equation of exchange D) the Lucas rule
Moral hazard occurs when one party to a contract changes his behavior in response to that contract and thus passes on costs of that behavior to the other party.
Answer the following statement true (T) or false (F)