The decision that households make to save is independent of the decisions businesses make to invest
Indicate whether the statement is true or false
T
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According to benefit-cost analysis
a. identification of the “acceptable” risk level is based on the criterion of allocative efficiency b. the efficient risk level is found where the MSB and MSC of risk reduction are equal c. the risk level associated with the maximum difference between TSB and TSC of risk reduction is allocatively efficient d. all of the above e. none of the above
Which of the following would not be considered an automatic stabilizer?
A. Defense spending B. Income tax C. Welfare payments D. Unemployment compensation
Assume the interest rate is 5%. What is the present discounted value of a $1,000 bond that pays a $50 coupon each year for 10 years?
A. $989.91 B. $999.91 C. $1,000.00 D. $1,009.99
Other things constant, which of the following would most likely cause the supply of garden hoses to decrease?
a. an increase in the price of plastic used to make garden hoses b. a technological advance that lowers the cost of producing garden hoses c. the occurrence of a very dry year with little rain d. a decrease in the price of grass seed