In the year after the stock market crash of 1929, stock prices on average ___
a. were lower than they had been in decades
b. were lower than in 1929 but higher than in the mid-1920s
c. rebounded to a level higher than in 1929
d. cannot be reliably calculated because no buyers could be found for many stocks, and hence no prices were reported
b. were lower than in 1929 but higher than in the mid-1920s.
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Using the Keynesian model, the effect of an increase in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the short run
A) a decrease; a decrease B) a decrease; no change C) an increase; an increase D) no change; a decrease
If asset A is a 30-year U.S. Treasury bond yielding 9 percent and asset B is a 30-year corporate bond issued by General Motors that also yields 9 percent, risk averse investors would
A) prefer asset A. B) prefer asset B. C) be indifferent between the two assets. D) differ according to their rate of time preference.
If income doubles and the quantity demanded of good x more than doubles, then good x can be described as a:
a. substitute good. b. complement good. c. necessity. d. luxury.
Because people move into and out of the labor force so often, statistics on unemployment are difficult to interpret
a. True b. False Indicate whether the statement is true or false