Government debt increases the interest rate and private investment
Indicate whether the statement is true or false
False. The interest rate does increase; however, this causes the level of private investment to decrease.
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The United States experienced depressions in all of the following decades except
A. the 1890s. B. the 1920s. C. the 1930s. D. the 1950s.
Under flexible exchange rates, the exchange rate is set by
A) the International Monetary Fund. B) the U.S. Federal Reserve's Board of Governors. C) the intersection of demand and supply curves in the currency markets. D) negotiations among central banks of the major industrial powers.
Appendix: An optimal incentives contract can induce the revelation of true costs in a partnership by
a. imposing penalties when costs are overstated b. offering bonus payments when costs are verified c. renewing the reliance relationship d. linking revealed cost to the partner's foregone expected profits e. enlisting third-party enforcement
Marginal utility is the
A. additional utility obtained by a fall in the price of a good. B. total amount spent to purchase one additional unit of a good. C. additional utility obtained by consuming one additional unit of a good. D. total happiness obtained from a consumption bundle.