If the real interest rate is less than the equilibrium real interest rate, there is a ________ of loanable funds, and ________
A) shortage; savers increase their saving supply to restore the equilibrium
B) shortage; borrowers have an easy time finding the funds they want
C) surplus; some borrowers cannot find the funds they want
D) shortage; some borrowers cannot find the funds they want
E) surplus; borrowers have an easy time finding the funds they want
D
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Are all points inside the production possibilities frontier unattainable?
What will be an ideal response?
The endowment effect suggests that that people
A) are concerned about the welfare of others. B) act in ways to distort market prices. C) have a strong attachment to their entitlement, regardless of whether they paid to acquire it. D) have a strong sense of fairness.
Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality. B) money is a leading, procyclical variable. C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money. D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
The government should extend the duration of unemployment benefits to those workers who lost their jobs due to outsourcing. This statement is best described as
A. an example of marginalism. B. a positive statement. C. an example of the fallacy of composition. D. a normative statement.