Consider a good whose consumption takes place publicly. Your decision to buy that good depends
A) both on the characteristics of the product and on how many other people are buying the good.
B) only on the price of the good.
C) only on how many other people buy the good.
D) only on the characteristics of the good.
A
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In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?
What will be an ideal response?
Which of the following statements is an example of the Fed's conditional commitment policy?
A) "In these circumstances, the Committee believes that policy accommodation can be maintained for a considerable period." B) "The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time." C) "Policy accommodation can be removed at a pace that is likely to be measured." D) "The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."
Friedman and Phelps argued that it was dangerous to think of the short-run Phillips curve as a menu of options for policymakers to choose from. Explain the logic of their argument
An investment carrying a current cost of $120,000 is going to generate $50,000 of revenue for each of the next three years. To calculate the internal rate of return we need to:
A. find the interest rate at which the present value of $150,000 for three years from now equals $120,000. B. find the interest rate at which the sum of the present values of $50,000 for each of the next three years equals $120,000. C. calculate the present value of each of the $50,000 payments and multiply these and set this equal to $120,000. D. subtract $120,000 from $150,000 and set this difference equal to the interest rate.