Everything else held constant, when financial frictions increase, the real cost of borrowing ________ so that planned investment spending ________ at any given inflation rate
A) increases; falls
B) decreases; falls
C) decreases; rises
D) increases; rises
A
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Mathematically, the value of the tax multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
A. MPC ? 1. B. (MPC ? 1) / MPC. C. 1 / MPC. D. 1 ? [1 / (1 ? MPC)].
Which of the following actions by Representative Morgan would constitute logrolling?
a. defying his party and voting with the other side on major pieces of legislation b. refusing to vote on an issue until more information is available c. voting only for proposals that are popular with the voters in his district d. voting for alcohol sales expansion in exchange for a vote to lower speed limits
The analysis of economic outcomes before and after some economic variable is changed is referred to as:
A) cardinal research. B) comparative statics. C) Pareto analysis. D) marginal study.
A business owner makes 50 items by hand in six hours. She could have earned $10 an hour working for someone else. If each item sells for $5 and the explicit costs total $14, accounting profit for 50 items is:
A. $74. B. $236. C. $176. D. $300.