Behavioral economists accept that people ________ their well-being but sometimes ________.
A. try to minimize; maximize it
B. try to maximize; make mistakes
C. try to maximize; maximize their bad choices
D. try to maximize; purposefully engage in less than optimal behavior.
Answer: B
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Under which of the following circumstances would the government be running a deficit?
A) G = $7 trillion T = $10 trillion TR = $3 trillion B) G = $7 trillion T = $7 trillion TR = $0 C) G = $5 trillion T = $5 trillion TR = $1 trillion D) G = $5 trillion T = $7 trillion TR = $1 trillion
In actual practice, short-term interest rates and long-term interest rates usually move together; this is the major shortcoming of the
A) segmented markets theory. B) expectations theory. C) liquidity premium theory. D) separable markets theory.
When a grocery store offers discount coupons in Sunday papers, it is trying to
a. Price discriminate b. Undercut its competition c. Reward the frequent readers d. Provide a social service
The laissez-faire approach popular before the Great Depression influenced the U.S. government to see business downturns as: a. natural phases in an otherwise healthy system and to therefore take short-term deficit spending measures to help recovery. b. natural phases in an otherwise healthy system and to therefore wait for recovery to occur naturally
c. serious maladies in an otherwise healthy system and to therefore work to redesign the system to avoid such failure in the future. d. failures of the type of system Adam Smith envisaged and to therefore work to move toward an open economy with free trade. e. failures of the system to achieve the form that Adam Smith envisaged and to therefore work to decrease government interference at the micro level.