Refer to Figure 2-17. One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F. Who are economic agents E and what is market F?
A) E = households; F = product markets B) E = households ; F = factor markets
C) E = firms; F = product markets D) none of the above
A
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If the economy is falling below potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in
A) government purchases. B) oil prices. C) the money supply and a decrease in interest rates. D) taxes.
To maximize joint profits, a cartel must determine the level of output at which:
A) joint marginal revenue equals the marginal cost of the largest member of the cartel. B) marginal revenue equals joint marginal cost. C) the horizontally sum of the members marginal cost curves is at a minimum. D) joint marginal revenue equals the marginal cost of the smallest member of the cartel.
Suppose Bob leaves his $50,000-a-year job as a financial advisor to P.E.T.S. and starts his own business selling spot remover for Dalmatians. In the first year his accounting profit is $70,000 . Based on this level of success, Bob should
a. return to his old job because his economic profit is negative b. return to his old job because his economic profit is smaller than his accounting profit c. return to his old job because his economic profit is less than his old salary d. stay with his new firm because his economic profit is positive e. stay with his new firm because accounting profit is positive
Recently, Dow Chemical 8.5 percent bonds maturing in 2006 closed at $92 with a face value of 100 . This means the Dow bonds
a. sold for $92 each. b. increased in value $92 that day. c. sold at 92 percent of par value. d. had the year of maturity changed to 1992.