Larger loans, other things constant, have lower interest rates because
A) only large, financially sound corporations obtain such loans.
B) large loans always have collateral.
C) large loans are always for short time periods.
D) the fixed costs associated with the handling charges as a percent of the total loan are less.
Answer: D
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Cost-push inflation is
A) inflation caused by decreases in aggregate supply that generate an even larger decrease in aggregate demand. B) inflation caused by increases in aggregate demand that are not matched by increases in aggregate supply. C) inflation caused by increases in aggregate demand that generate an even larger increase in aggregate supply. D) inflation caused by decreases in aggregate supply that are not matched by decreases in aggregate demand.
A coffee shop sells a small cup of coffee at $3, while a large cup, which is twice as big, at $5. This is an example of
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) actual cost differences.
The host at a party offers Justin a sixth beer. Justin says, "No thanks, man. The marginal utility of that fifth beer was, like, 20 cents, but the marginal utility of the sixth would be minus 10 cents." From his comments, we deduce that Justin
a. is an alcoholic. b. may think that a sixth beer would make him sick. c. is irrational. d. wrongly estimates the marginal utility of the fifth beer.
Keynes believed that saving is
A) more responsive to changes in income than to changes in interest rates. B) less responsive to changes in income than to changes in interest rates. C) equally responsive to changes in income and to changes in interest rates. D) dependent only on changes in interest rates.