The production possibilities curve can shift inward when
A) production increases.
B) employment increases.
C) the stock of productive capital rises.
D) a country experiences a natural disaster.
Answer: D
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Gretchen expects the price level to rise from 104 this year to 108 next year, and she is able to incorporate these expectations into her wage contract. If the price level rises to 106 next year instead of 108, which of the following will occur?
A) Gretchen's real wage may rise or fall, depending on the unemployment rate. B) Gretchen's real wage will rise. C) Gretchen's real wage will fall. D) Gretchen's real wage will be unchanged.
Banks are exposed to interest rate risk primarily because
A) interest rates are very difficult to forecast. B) the maturities of banks' assets and liabilities differ. C) borrowers from banks are prone to default. D) depositors are always searching for a slightly higher interest rate.
A normative economic statement:
a. is a model used to collect data. b. is a statement of fact. c. is a statement of what ought to be, not what is. d. indicates what will occur if certain assumptions are true.
Current assets minus current liabilities equals
a. profit b. equity c. capital d. revenue e. net working capital