A temporary decrease in government purchases causes the real interest rate to ________ and the price level to ________ in general equilibrium.
A. rise; rise
B. rise; fall
C. fall; rise
D. fall; fall
Answer: D
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Which of the following would lead to an increase in the supply of ethnic restaurants in a college town?
A) An increase in the wages paid to restaurant workers B) An increase in the price of American chain restaurants, and consumers regard American chain restaurants and ethnic restaurants as substitutes C) An increase in the demand for ethnic restaurants D) All of the above. E) None of the above.
An acquisition will not be profitable
a. In any circumstances b. As long as you paid lower than the company's discounted future profits c. Without a synergy that makes the company more valuable to you than to the current owner d. None of the above
The following is an example of risk aversion
a. those applying for a well-paid job tend to be unqualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is the most qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
Which actor in the simplified circular flow model buys or rents land, labor, and capital?
A. Government B. Markets for factors of production C. Households D. Firms