A risk averse person has diminishing marginal utility of wealth
Indicate whether the statement is true or false
TRUE
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The real interest rate for investments reflects not only the short-term real interest rate set by the central bank, but also the financial frictions
When the policy rate has hit the floor of zero, to stimulate the economy at given inflation rates, policymakers can A) lower the financial frictions. B) lower the short-term real interest rate. C) lower both the short-term real interest rate and the financial frictions. D) lower the policy rate.
GDP per capita provides a reasonably accurate measurement of a country's income distribution
a. True b. False Indicate whether the statement is true or false
Collusion between two firms occurs when
A) the firms independently pursue strategies that could hurt each other. B) firms explicitly or implicitly agree to adopt a uniform business strategy. C) announce that each will match its rival's market price. D) firms act altruistically to bring about the economically efficient outcome.
The ratchet effect would suggest that:
Refer to the graph above.