Higher prices may serve the public interest when:
a. there is a shortage of goods or services available
b. there is an uneven distribution of traffic on alternate routes
c. higher prices never serve the public interest
d. both a and b
d
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Which of the following theories predicts that current consumption increases when a person expects an increase in future income?
A) the life-cycle theory of consumption B) the Keynesian theory of consumption C) the permanent income hypothesis D) all of the above
What is the yield to maturity of a consol with a coupon of $85 and a price of $944.44?
A) 5.56% B) 8.50% C) 9.00% D) Not enough information has been provided to determine the answer.
The contemporary rate of unemployment that is often put forth as a benchmark high-employment level ranges from
a. 4.5 to 5 percent. b. 4.0 to 6 percent. c. 6 to 6.5 percent. d. 1 to 4.5 percent.
Suppose that a foreign monopolist supplies the entire domestic market (there is no domestic production). The home country then applies a 5% tariff on imports from the foreign monopolist. How will the tariff affect the price in the home market?
a. It will increase by more than 5%. b. It will increase by 5%. c. It will increase by less than 5%. d. It will not change.