As inflation rates increase, borrowing and lending contracts tend to
A. increase in size.
B. decrease in size.
C. decrease in length of time.
D. increase in length of time.
Answer: C
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Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes ________, to make the ________ of the firm remaining in New York.
A) an incentive; marginal benefit exceed the marginal cost B) an incentive; marginal cost exceed the marginal benefit C) a command; marginal benefit exceed the marginal cost D) a command; marginal cost exceed the marginal benefit
If the Fed wants to reduce the value of the dollar, it will
A) sell foreign assets and buy dollars. B) sell dollars and buy foreign assets. C) buy foreign assets and also buy dollars. D) sell foreign assets and also sell dollars.
Coffee and donuts are complements in consumption. Suppose the economy expands so that consumer income increases, and coffee is a normal good
What impact does this change in the coffee market have on the donut market under a general equilibrium analysis? A) Donut demand shifts rightward and donut price and quantity increase B) Donut demand shifts rightward, donut price increases, and donut quantity declines C) Donut demand shifts leftward, donut price declines, and donut quantity increases D) Donut demand shifts leftward and donut price and quantity decline
The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency
a. True b. False