The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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Consider the Matching Pennies game:
Player B - heads Player B - tails Player A - heads 1, -1 -1, 1 Player A - tails -1, 1 1, -1 Suppose Player B always uses a mixed strategy with probability of 3/4 for head and 1/4 for tails. Which of the following strategies for Player A provides the highest expected payoff? A) Mixed strategy with probability 1/4 on heads and 3/4 on tails B) Mixed strategy with probability 1/2 on heads and 1/2 on tails C) Mixed strategy with probability 3/4 on heads and 1/4 on tails D) Pure strategy in which Player A always selects heads
The costs of unemployment to an individual out of work are larger now than in the 1930s.
Answer the following statement true (T) or false (F)
Which of the following statements is false?
A. In the early 19th century, the United States suffered from a scarcity of labor-relative to land. B. At the time of the American Revolution, about nine of every ten Americans lived on a farm. C. The transcontinental railroads completed in the 1880s brought railroads to every region of the country. D. Between 1939 and 1944, federal government spending rose by 400 percent.
When Frank's income was $100 per week, 10 units of good A were demanded. Now his income is $150 per week and 12 units of good A are demanded. Using the percentage change formula, the income elasticity of demand for good A equals
A) 0.45. B) 0.40. C) 2.20. D) 2.50.