The decline in investment spending accounts for how much of the decline in output during a recession?
a) one-third
b) one-seventh
c) two-sevenths
d) two-thirds
Ans: d) two-thirds
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Which group below will generally have a more difficult time finding employment if a nation's minimum wage were increased?
A) Those with more work experience B) Those who are among the younger job seekers C) Those who form the majority race in the population D) All of the above.
If there is a recession, the Fed would most likely
a. encourage banks to provide loans by lowering the discount rate b. encourage banks to provide loans by raising the discount rate c. restrict bank lending by lowering the discount rate d. restrict bank lending by raising the discount rate e. restrict bank lending by lowering the federal funds rate
How might a behavioral economist explain the endowment effect?
a. People always seek to maximize their marginal utility, even if their behavior is irrational. b. People are more likely to cheat other people if it will raise their personal status above the status of others. c. The only way people can maximize their marginal utility is to pretend their personal property is highly valuable. d. People tend to use their personal history as a reference point for the value of an item rather than the market price.
The Sarbanes-Oxley Act of 2002
A) created the Consumer Financial Protection Bureau to be housed in the Federal Reserve. B) mandates that firms raise funds for expansion only through the sale of stock or from bank loans, but not from the sale of corporate bonds. C) requires that CEOs personally certify the accuracy of financial statements. D) established the Financial Stability Oversight Council to identify risks to the financial system.