An increase in the interest rate would induce people to
A. get rid of all their money and buy stocks with it.
B. hold a smaller fraction of their wealth in the form of money.
C. sell their least liquid assets and hold more money in case interest rates go up again.
D. sell shares of stock and buy bonds, but would have no effect on their desire to hold money.
Answer: B
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Which of the following would be illegal under the Robinson-Patman Act? a. Ford and General Motors meet to fix the price of cars. b. Computer makers form a cartel. c. General Mills and Kelloggs decide to merge. d. Exxon sells gas at a higher wholesale price to independent gas retailers than to Exxon retailers
e. Exxon Oil and Mobil Oil elect the same person to their boards of directors.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. The expected value of John's earnings if he chooses to expand is:
A. $900,000 B. $140,000 C. $320,000 D. $230,000
Which of the following tax does not decrease income inequality?
A. Sales taxes B. Personal income taxes C. Estate taxes D. Negative income taxes
Examples of spillover benefits associated with a college education include:
A. no external benefits. B. workplace externalities only. C. civic externalities only. D. both workplace and civic externalities.