During the recession of 2008, the U.S.experienced lower real interest rates at the same time investment and GDP were falling
How would a Classical economist explain this recession? Provide a graph of the Classical capital market to illustrate your arguments.
This must have been caused by a fall in investment which reduced the capital stock and aggregate supply.
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Which of the following models results in the highest level of output assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Cartel
A business owner applies for a bank loan to launch a fairly low-risk project. After receiving the loan, she cancels the low-risk project and instead uses the borrowed funds for a high-risk venture. This is an example of
A) financial intermediation. B) the transactions approach. C) moral hazard. D) capital controls.
There is less of a principal-agent problem between managers and apple pickers than between managers and secretaries because
a. apple pickers naturally work harder b. secretaries get paid less than their worth c. productivity is easier to measure in apple picking than in secretarial services d. a secretary's marginal product is easier to estimate than an apple picker's e. managers can watch apple-pickers more closely than they can secretaries
The value of the tax multiplier is always positive because an increase in tax increases the marginal propensity to consume
a. True b. False Indicate whether the statement is true or false