In an economy that is at full employment, an increase in money supply will result in inflation, unless
A) velocity increases.
B) velocity decreases.
C) real GDP falls.
D) tax reduction is proportional to increases in the money supply.
B
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Disposable income is defined to be:
A. total income minustaxes. B. total income plus taxes. C. total income minus depreciation. D. All of these are true.
Other things being equal, a reorganization of the OPEC cartel to permit it to increase world oil prices by 70 percent would most likely have which effect?
A. It would shift the aggregate demand curve right. B. It would shift the aggregate supply curve right. C. It would shift the aggregate demand curve right and the aggregate supply curve left. D. It would shift the aggregate supply curve left.
A firm can invest in one of two projects-the purchase of new delivery vans or the training of its sales staff in the use of new sales techniques. Both projects cost the same amount of money. The purchase of new delivery vans is expected to reduce costs by $5,000 each year for 10 years. The training of the sales staff in the use of a new sales technique is expected to increase revenues by $5,000 each year for 5 years. Which of the following is true?
A. The expected rates of return for these two projects cannot be compared, as one project reduces costs and the other increases revenues. B. The training of the sales staff would have the higher expected rate of return, as it increases revenues whereas the purchase of delivery vans only reduces costs. C. Each of these projects would have the same expected rate of return, as they both cost the same. D. The purchase of delivery vans would have the higher expected rate of return, as it will reduce costs for a longer time period than the sales staff training will increase revenues.
What is the approximate cost to a professional basketball team of giving ten free tickets for a particular game to children in an orphanage?
A) Probably nothing if the game is not sold out. B) The face price of the tickets C) The value of the opportunities forgone by putting on the game, divided by the number of seats (times ten) D) We cannot tell unless we know the value the orphans place on attending.