The balance-sheet channel of monetary policy works because it can:
A. change the value of a borrower's assets and liabilities, but it can't change a borrower's net worth.
B. increase a borrower's asset value but not the burden of his/her liabilities.
C. increase a borrower's assets and reduce the cost of his/her liabilities.
D. none of the answers given is correct.
Answer: C
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The Laffer curve specifies
a. a negative relationship between marginal tax rates and tax revenue. b. a positive relationship between marginal tax rates and tax revenue. c. no relationship between marginal tax rates and tax revenue. d. none of the above.
Ask your grandparents about their first love and they would probably remember it well. Ask about the second, and it would probably draw a blank. Think in terms of utility analysis and their responses come as no surprise because what they remember or don't remember, even about love, reflects the
a. same idea that is associated with the water and diamond paradox b. law of maximizing utility c. law of diminishing marginal utility d. idea that utility is very durable over time e. fact that total utility must be declining
According to the economy in Figure 5.3, net exports
A. Made a positive contribution to GDP from 1970 to 1985. B. Were a negative number from 1970 to 1985. C. Did not impact GDP from 1990 to 2000 because exports were greater than imports. D. Were a negative number from 1990 to 2000.
After tickets for a major sporting event are purchased at the official box office price, a market often develops whereby these tickets sell at prices well above the official box office price. Which of the following scenarios would NOT be able to explain this result?
A) The official price was below equilibrium from the moment the tickets were available. B) Increased publicity causes the demand curve for the event to shift rightward. C) The event was not a sellout. D) Not everyone who wanted a ticket was able to buy one at the box office.