Which of the following is NOT one of the concerns that economists have about the Fed's use of quantitative easing (QE)?
A. That long-term interest rates may become negative
B. That interest rates will rise sharply when QE is reversed
C. That too much money is being added to the economy
D. That it will eventually lead to inflation
Answer: A
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The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit. In the above game, in the Nash equilibrium,
A) Firm A and Firm B are both making $40,000 in economic profit. B) Firm A and Firm B are both making $55,000 in economic profit. C) Firm A is making $60,000 and Firm B is making $55,000 in economic profit. D) Firm A and Firm B are both making $60,000 in economic profit. E) Firm A and Firm B are both making $35,000 in economic profit.
If an economy tried to use bananas as money, which function would bananas likely have the most difficult time fulfilling?
A) a store of value B) a unit of account C) a medium of exchange D) a means of payment
Which of the following statements about the history of inflation in the U.S. is true?
a. Inflation averaged roughly 2% from 1950-19-65, but has fallen since then. b. Inflation has averaged roughly 2% since 1950. c. Inflation averaged roughly 2% from 1950-1965, rose until the early 1980s, and has fallen slowly since. d. Inflation has gradually climbed since the 1950s.
Janis mows the lawn in 1 hour and types a paper in 1 hour. Kristen mows the lawn in 2 hours and types a paper in 1 hour. Which of the following statements is true?
a. Kristen has an absolute advantage in typing and a comparative advantage in mowing. b. Janis has an absolute advantage in both activities and a comparative advantage in typing. c. Janis has an absolute advantage in both activities and a comparative advantage in mowing. d. The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis. e. Neither Janis nor Kristen would gain from specialization.