If X and Y are perfect substitutes, which of the following assumptions about indifference curves is not satisfied?
A) Completeness
B) Transitivity
C) More is preferred to less
D) Diminishing MRS
E) none of the above (All of the above assumptions are satisfied.)
D
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Which of the following statements is false?
A. The issuer of a bond is a borrower. B. The person who buys a bond is a lender. C. Interest earned on corporate bonds is exempt from federal income taxes. D. The coupon rate on a bond is the percentage of the face value that the bondholder receives annually until the bond matures.
By requiring that policyholders pay a deductible on a claim, insurers guard against
a. symmetrical information b. adverse selection c. natural selection d. moral hazard e. the winner's curse
Under what condition can the U.S. government continue to pay interest on a rising debt without eventually needing to increase the average tax rate?
a. If the national debt grows at the same rate as nominal GDP b. If the nominal interest on the national debt grows faster than nominal GDP c. If the total interest payments on the national debt grow faster than nominal GDP d. If the national debt grows faster than nominal GDP e. If the real interest on the national debt grows faster than real GDP
When we add up the total payments made to households that furnish the resources used to produce the goods and services in the economy, we are using
a. the income approach b. the expenditure approach c. the output approach d. the aggregate demand approach e. GDP product