In the loanable funds framework, the ________ is measured on the vertical axis
A) price of bonds
B) interest rate
C) quantity of bonds
D) quantity of loanable funds
B
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The economic way of thinking assumes a politician ignores
A) the costs of her actions. B) the benefits of her actions. C) her own interests after taking the oath of office. D) all of the above. E) none of the above.
Average revenue is equal to
a. TR/Q. b. (P × Q)/P. c. TR × Q d. All of the above are correct.
Suppose that the interest rate available to you on a long-term bond is 4 percent. If you hold $1,000 of your wealth in currency instead of in the form of a bond, the annual opportunity cost is:
A. $0.04. B. $4. C. $40. D. $400.
What is the benefit of understanding the income and the substitution effects?
A) The income effect might run in the opposite direction of the substitution effect. B) The income effect always runs in the opposite direction of the substitution effect. C) The income and substitution effects just offset each other, which explains a lot. D) The income and substitution effects are proportional to each other.