Specialization and trade can take place only if a country is endowed with more of something compared to other countries
a. True
b. False
Indicate whether the statement is true or false
False
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The government is considering a mandatory savings program that forces people to save 8% of their income each year for retirement. What behavioral biases might be used as a justification for such a program? (Choose all that apply.) a. Limited cognitive ability, preventing people from being able to accurately estimate how much an investment early in one's career will grow. b. Limited willpower,
preventing people from being able to give up the pleasure of current consumption for the benefits of consumption later in retirement. c. Limited commitment power, leading the government to use the funds for current expenditures. d. Risk aversion, leading people to consume now rather than wait until the uncertain future.
The consumer price index (CPI) _____ inflation because it includes an item in the market basket only after the product becomes _____
a. overstates; unpopular b. overstates; obsolete c. overstates; widely used d. understates; widely used e. understates; obsolete
The demand curve for capital is ____ and its supply curve is ____
a. downward sloping; downward sloping b. upward sloping; upward sloping c. downward sloping; upward sloping d. upward sloping; downward sloping
Figure 11-2
?
Which graph in Figure 11-2 best reflects a Keynesian’s view of the short-run impact of an increase in the personal income tax rate?
A. 1 B. 2 C. 3 D. 4