The theory of efficient markets suggests that:
A) systemically important financial institutions are more likely to fail.
B) long-term investments by banks are more profitable than short-term investments.
C) interest rates and inflation rates are inversely related.
D) all movements in stock markets are based on rational appraisals of new information.
D
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The circular flow diagram implies that if accounting is done correctly, ________
A) the flow of income must exceed the implied value of the factors of production B) the implied value of the factors of production must exceed the flow of income C) the flow of expenditure must equal the income of the households making those expenditures D) the flow of expenditure must exceed the income of the households making those expenditures
In the long run in monopolistic competition, the demand curve facing the typical firm
a. is perfectly elastic b. slopes upward c. is tangent to the firm's average total cost curve d. lies above the firm's average total cost curve e. is the same as the portion of the firm's marginal cost curve above average variable cost
Which of the following is not an example of an infrastructure?
a. a transportation system b. a communications system c. a values system d. an educational system e. an energy system
A consumer has two basic choices: rent a DVD movie for $4.00 and spend 2 hours watching it, or spend $13 for a miniature golf game that takes 1 hour. If the marginal utilities of the movie and the miniature golf game are equal, and the consumer values time at $12 an hour, the rational consumer will most likely:
A. Rent the movie instead of playing miniature golf B. Play miniature golf instead of renting the movie C. Be indifferent between the movie and the miniature golf game D. Not have enough basis for making a utility-maximizing decision