Which of the following is the largest expenditure item of state governments?
A. Health and hospitals
B. Highways
C. Education
D. Public welfare
Answer: C
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When the price of audio books, a normal good, falls, causing your purchasing power to rise, you buy more of them due to
A) the deadweight loss effect. B) the elasticity effect. C) the income effect. D) the substitution effect.
In sequential games, the player who moves first:
A. sometimes has an advantage and sometimes has a disadvantage. B. always has a first-mover advantage. C. has a first-mover advantage only when the second mover fails to choose the dominant strategy. D. has a first-mover advantage only when he or she is able to make a credible threat or promise to choose a dominated strategy.
People who have bought a house using an adjustable-rate mortgage are most likely to be hurt by
A. an increase in the federal funds rate. B. a decrease in the reserve requirement. C. an increase in the inflation rate. D. an increase in the amount of the Fed's discount lending.
Once an equilibrium is achieved, it can persist indefinitely because
A) shocks that shift the demand curve or the supply curve cannot occur. B) shocks to the demand curve are always exactly offset by shocks to the supply curve. C) the government never intervenes in markets at equilibrium. D) in the absence of supply/demand shocks no one applies pressure to change the price.