Net wealth is calculated by subtracting what from assets?
a. Capital
b. Liabilities
c. Interest
d. Depreciation
d
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Suppose, after undergoing genetic testing, you discover that you have a health condition that could result in the emergence of a disability which would make it impossible for you to continue to work. The probability of this happening is 50%. Currently your expected lifetime earnings are $5,000,000, but if the disability hits, your expected lifetime earnings will consist primarily of income earned from government support programs -- and will not add up to more than $1 million. a. Suppose that you are risk averse and your tastes are state-independent. Illustrate your expected utility in a graph with lifetime consumption on the horizontal and utility on the vertical axis. b. Illustrate how much you would be willing to pay for full insurance. c. Illustrate what you showed in (b) in a
different graph that has consumption in the "good" state on the horizontal and consumption in the "bad" state on the vertical. d. What would a full menu of actuarily fair insurance contracts look like in your graph from part (c)? Where would you optimize in that graph? e. Now suppose that you believe consumption will be more meaningful if the health condition does not materialize. What changes in your graph from part (d)? What will be an ideal response?
?The Keynesian-cross model is based on the idea that the ____ must equal total output.
a. components of consumption
b. components of aggregate supply
c. components of aggregate demand
d. net exports
Demand deposits are included as part of:
a) only M1. b) only M2. c) neither M1 nor M2. d) M1 and M2.
Which of the following statements about the right to private ownership is false?
A. It enables individuals to obtain, use, and dispose of land and capital resources as they see fit B. It encourages investment and innovation, and thus fosters economic growth C. It extends to intangibles such as pieces of music and computer programs D. It weakens the incentive to maintain the property that one already owns