An application of behavioral economics is:
A. time inconsistency.
B. thinking irrationally about costs.
C. forgetting the fungibility of money.
D. All of these are applications of behavioral economics.
D. All of these are applications of behavioral economics.
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Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
Firms that can effectively price discriminate
A) can be either perfectly competitive firms or monopolies. B) can prevent the resale of their products. C) have only one class of buyers, buyers willing to pay a high price. D) Both answers A and B are correct. E) Both answers A and C are correct.
Which of the following types of mortgage loans became more common during the housing boom of the early-to-mid 2000s?
A) those with flawed credit histories B) thirty-year, fixed-rate mortgages C) prime Mortgages D) those with down payments of at least 20%
Firms discount future profits at the interest rate r because
A) it is the interest rate on their debt. B) it is the same rate as for households. C) Ricardian equivalence holds. D) it has to equal the marginal productivity of capital in equilibrium.