Prices that firms charge should take into account the elasticity of demand
Indicate whether the statement is true or false
True
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If the Federal Reserve "pegs" the interest rate, then in the IS-LM framework, the LM schedule
a. is vertical. b. becomes horizontal. c. slopes upward to the right. d. slopes downward and the left.
The evidence with respect to the validity of Ricardian Equivalence ________
A) suggests that it matters little whether government debt is held by the central bank or by the public B) clearly provides support for the argument C) clearly refutes the argument D) is difficult to interpret, since so many factors may affect national saving
The adverse selection problem is most likely in which of the following occupations?
a. waiter/waitress b. barber c. college professor d. supermarket cashier e. tightrope walker
Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m. Now it is considering a further extension to 11 p.m. In making this marginal decision, the results of having gone from 9 p.m. to 10 p.m. are
A) no longer relevant to the current decision. B) relevant if the marginal costs and benefits were unequal. C) relevant since they are part of the calculation of total costs and benefits. D) relevant if the marginal costs and benefits were equal.