Use the following graph of the total demand for money to answer the next question.
Assume we begin at point a. A decrease in the nominal GDP will can be shown as a move to ________.
A. point b
B. point c
C. point d
D. point e
Answer: C
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An economy operating its plant and equipment at full capacity implies a capacity utilization rate of
A. 40 percent. B. 70 percent. C. 85 percent. D. 100 percent.
The marginal benefit of a worker to a firm is the value of the extra output that results when
A) work is outsourced to a foreign country. B) workers get paid for working overtime. C) some workers are laid off and the remaining workers become more productive. D) an additional worker is hired.
Assume the inverse demand function for a good can be written as: P = 30 - 2Q. Assuming P = $10, the resulting consumer surplus would be equal to:
A) $50. B) $100. C) $200. D) $225.
Moral hazard is, in general, the asymmetric information problem that occurs
A) after a transaction is consummated. B) due to a size difference in the parties to a transaction. C) with equity financing. D) before a transaction is consummated.