The maximum quantity of good X that is affordable is:
A. M/PX.
B. M/X.
C. PYY.
D. M/PY.
Answer: A
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If a firm is producing an output level at which marginal revenue exceeds marginal cost, the firm will increase profits by reducing its output level
a. True b. False Indicate whether the statement is true or false
If the Fed buys government bonds on the open market, which of the following is likely to occur?
A. The money supply will expand. B. The market rate of interest on government bonds will increase. C. The market rate of interest on corporate bonds will increase. D. The amount of investment spending will decrease.
A long run equilibrium: a. Will be at a greater output level than the natural level of real output. b. Will be at the natural level of real output
c. Will be at a smaller output level than the natural level of real output. d. Long-run equilibrium could be at any of the above levels of output.
Give an example of adverse selection and an example of moral hazard using homeowners insurance