Just as the theory of the competitive firm provides a more complete understanding of supply, the theory of consumer choice provides a more complete understanding of
a. demand.
b. profits.
c. production possibility frontiers.
d. wages.
a
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Municipal bonds have default risk, yet their interest rates are lower than the rates on default-free Treasury bonds. This suggests that
A) the benefit from the tax-exempt status of municipal bonds is less than their default risk. B) the benefit from the tax-exempt status of municipal bonds equals their default risk. C) the benefit from the tax-exempt status of municipal bonds exceeds their default risk. D) Treasury bonds are not default-free.
Profits will be maximized when the slope of the total revenue curve and the slope of the total cost curve equal zero.
Answer the following statement true (T) or false (F)
The real interest rate is defined as the:
a. actual interest rate. b. fixed-rate on consumer loans. c. nominal interest rate minus the inflation rate. d. expected interest rate minus the inflation rate.
Refer to the information. If both government spending and taxes are zero, the equilibrium level of GDP is:
The following information is for a closed economy:
A. $200.
B. $300.
C. $400.
D. $500.