Arbitrage causes an equalization of the _________ when assets are identical or nearly identical
A. levels of risk of assets
B. rates of return of assets
C. time when payments are made from assets
D. prices of assets
B. rates of return of assets
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Sales taxes generate nearly 50% of the tax revenue for state and local governments
a. True b. False Indicate whether the statement is true or false
For a monopolist, marginal revenue is:
A.) Equal to price, just as it is for a perfectly competitive firm. B.) Constant up to the rate of output that maximizes total revenues. C.) Always less than price, after the first unit. D.) The same as the demand curve.
In Monetarist theory, the demand to hold money is:
a. The same as the demand to borrow real loanable funds. b. Upward sloping because as the real risk-free interest rate rises, people want to hold more money. c. Rather unstable because it changes greatly with movements in the real risk-free interest rate. d. Neutral, in the sense that it is independent from all macroeconomic variables. e. Rather stable and does not change greatly with movements in the real risk-free interest rate.
The following diagram shows the rate of inflation each year during a five-year span. Use this diagram to answer the next question.
In which year are people on fixed incomes hurt the most?
A. Year 2 B. Year 3 C. Year 4 D. Year 5