Businesses can buy what kind of asset when they wish to invest in government securities and business debt?
a. a savings deposit
b. a demand deposit
c. a money market mutual fund
d. a NOW account deposit
e. a money market mutual deposit
C
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In the DMP model
A) the market wage is equal to the marginal product of labor. B) the market wage is equal to the marginal rate of substitution of leisure for consumption. C) the wage is equal to the marginal rate of transformation. D) the wage is determined by bargaining between the firm and the worker.
The official unemployment rate would be higher if it included the existence of hidden unemployment or individuals who are: a. on unemployment compensation
b. not working. c. working part time but prefer full-time work. d. voluntarily retired. e. unemployed and looking for work.
Economists believe that scarcity forces everyone to
a. satisfy all their wants b. abandon consumer sovereignty c. limit wants d. create unlimited resources e. make choices
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and GDP Price Index rises. b. The real risk-free interest rate falls, and GDP Price Index falls. c. The real risk-free interest rate rises, and GDP Price Index falls. d. The real risk-free interest rate and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.