Recent proposals to allow the Social Security trust fund to invest in the stock market (instead of buying government bonds) are based on the premise that
A) the returns to stocks are higher than the returns to bonds.
B) the returns to stocks aren't as risky as the returns to bonds.
C) the transactions costs for investing in stocks are lower than the transactions costs for investing in bonds.
D) stocks are more liquid than bonds.
A
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If real GDP grows at 3 percent a year, the quantity of money grows at 5 percent a year, and the velocity of circulation is constant, then the price level must be
A) increasing at 8 percent a year. B) decreasing at 2 percent a year. C) increasing at 15 percent a year. D) increasing at 2 percent a year. E) decreasing at 8 percent a year.
The study of economics
A) focuses mainly on individual consumers. B) arises from the fact that our wants exceed available resources. C) recognizes that scarcity does not affect rich nations. D) deals mainly with microeconomics.
Which of the following statements is correct? I. A drop in the foreign exchange value of the dollar would decrease aggregate demand II. A decrease in the amount of money in circulation would increase aggregate demand
A) I only B) II only C) Both I and II D) Neither I nor II
A monopsonist in the labor market has
A) a perfectly elastic labor supply. B) a decreasing average variable cost. C) an upward sloping labor supply curve. D) a downward sloping marginal revenue product curve.