Figure 29-1
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In Figure 29-1, which panel shows the effect of inflation on the interest rate?
A. Panel (A)
B. Panel (B)
C. Panel (C)
D. Panel (D)
Answer: A
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When price was 10, quantity demanded was 50. When price decreased to 8, quantity demanded increased to 60. Therefore, when price decreased, total revenue
A. decreased from 500 to 480, indicating that demand is inelastic. B. decreased from 500 to 480, indicating that demand is elastic. C. increased from 480 to 500, indicating that demand is inelastic. D. increased from 480 to 500, indicating that demand is elastic.
One way insurance firms reduce moral hazard costs is by doing which of the following?
a. charging the buyer lower payments regardless of whether the buyer engages in risky behavior b. making buyers prove they will not engage in risky behavior before they may buy insurance c. charging the buyer higher payments regardless of whether the buyer engages in risky behavior d. making the buyer pays some of the costs in the form of deductibles and co-pays
The interest rate is determined purely by market forces, and not by government involvement
a. True b. False Indicate whether the statement is true or false
If a country runs a trade deficit to finance increased current consumption, it will have to increase consumption in the future to pay back its borrowings.
Answer the following statement true (T) or false (F)