Maryann and Don want to open their own deli. To do so, Maryann must give up her job, at which she earns $20,000 per year, and Don must give up his part-time job, at which he earns $10,000 per year. They must liquidate their money market fund, which earns $1,000 interest annually. The rent on the building is $10,000 per year, and expenses for such necessities as utilities, corned beef, and pickles
are $35,000 annually. What is the explicit cost per year of operating the deli?
a. $10,000
b. $35,000
c. $45,000
d. $31,000
e. $76,000
C
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When the government develops policies to stabilize the economy
A) only expansionary fiscal policy is impacted by the multiplier effect. B) only contractionary fiscal policy is impacted by the multiplier effect. C) these policies are unaffected by the multiplier effect. D) it needs to consider the multiplier effect for all fiscal policies.
What can the Federal Reserve do to reduce the natural rate of unemployment?
A) nothing B) follow expansionary monetary policy that will reduce inflation C) follow expansionary monetary policy that will increase inflation D) follow contractionary monetary policy that will increase inflation
A sequential game can be used to analyze whether a retail firm should build a large store or a small store in a city, when the correct choice depends on whether a competing firm will build a new store in the same city. Which of the following is used to analyze this type of decision?
A) an either-or graph B) a decision tree C) a decision matrix D) a sequential matrix
A Treasury expenditure financed through borrowing from the Federal Reserve will cause the money supply
A) and bank reserves to rise by an equal amount. B) and bank reserves to fall by an equal amount. C) to rise but bank reserves to rise by a greater amount. D) to rise by a greater amount than the rise in bank reserves.