The seller of an existing house claims that it is in great shape, and he is offering a 2-year warranty on the house. His statements about the quality of his house are likely to be:
A. overstated.
B. true because offering a warranty is a costly-to-fake signal.
C. credible even in the absence of a warranty.
D. untrue because otherwise he would not offer the warranty.
Answer: B
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If economists estimate the price elasticity of demand to be 0.75 for good X and 1.25 for good Y, then the government can raise the most revenue by taxing good Y
Indicate whether the statement is true or false
The fraction of people who would like to be employed, but can't find work is called the:
A. inflation rate. B. participation rate. C. average labor productivity rate. D. unemployment rate.
The rules-based monetary policy reads: The annual growth rate in the money supply will be equal to the average annual growth rate in Real GDP minus the growth rate in velocity. If the average growth rate in Real GDP this year is 3 percent and the growth rate in velocity is 2 percent, then the money supply will increase by ______________ percent this year
A) 1 B) 2 C) 3 D) 4
Which of the following statements is correct?
A. Export sales are not important to U.S. industries because U.S. GDP is so large. B. Many U.S. industries are very dependent on export sales. C. The United States is increasingly dependent on exports, but not on imports. D. The United States would not be affected if it quit importing goods.