If the federal funds rate falls, economic growth is most likely to do what?
A. speed up
B. show no change
C. slow down
Answer: A. speed up
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The International Maritime Bureau said the waters off Somalia are the world's most dangerous, accounting for nearly a third reported pirate attacks worldwide. Suppose all boats are insured to $100,000 and pay a premium of $15,000 each
Suppose 10 out of 100 boats are attacked by pirates and these 10 file claims with their insurance. Has the insurance company earned an economic profit? A) Yes, they earned an economic profit of $500,000. B) Yes, they earned an economic profit of $50,000. C) No, they sustained an economic loss of $85,000. D) No, they broke even.
Refer to Figure 28-9. A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979, would result in a movement from C to A
A) expansionary fiscal policy B) contractionary monetary policy C) contractionary fiscal policy D) expansionary monetary policy
When it comes to macro-policy, most economists now agree that
a. policy should be constantly changing in response to business cycle conditions. b. policy changes should exert stimulus during inflationary booms and restraint during downturns. c. given our ability to forecast economic conditions, policy changes easily can be implemented in a timely manner. d. policy changes are difficult to time correctly, and therefore constant shifts in policy are likely to be a source of economic instability.
Suppose Bill receives a consumer surplus of $3 on his purchase of a pizza, for which he paid $9. The price Bill was willing and able to pay is
a. $15 b. $12 c. $9 d. $6