Suppose that a national election occurs that generates a feeling of certainty in the market. It is likely that this incident will ________ the level of investment spending.
A. decrease
B. not affect
C. increase
D. neutralize
Answer: C
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In the economy of Pandemonia, 500 people have jobs, 500 people are not working but are searching for work, and 1500 people don't work and don't seek work. The unemployment rate is
A) 10 percent. B) 40 percent. C) 50 percent. D) 66 percent. E) none of the above.
Recall the Application about the Fed's policy of quantitative easing to answer the following question(s). Recall the Application. The Fed's goal of this policy was to ________ the prices of government bonds and mortgage securities and ________ the interest rates on both bonds and mortgages.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease
Suppose that in Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In Italy, the opportunity cost of producing a gallon of beer is 3 gallons of wine
a. What is the opportunity cost of producing a gallon of wine for Germany? b. What is the opportunity cost of producing a gallon of wine for Italy? c. Which country has a comparative advantage in the production of beer? d. Which country has a comparative advantage in the production of wine?
It is widely believed that the Federal Reserve's most important function is
A) to provide loans to the federal government. B) to regulate the money supply. C) to set the legal, controlled consumer interest rates. D) to lend to risky customers.