Of federal government spending, about _____ is spent on defense and about _____ is spent on Social Security, Medicare and Medicaid.
Fill in the blank(s) with the appropriate word(s).
23 percent; 39 percent [updates to Figure 1]
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A share of stock represents a claim on the
a. output of the firm b. firm's assets and earnings c. assets of the board of directors d. managers' incomes e. firm's future losses
Suppose you own a savings bond that will pay you $100 in 7 years. If the annual interest rate is 2%, what is the present value of the savings bond?
a. $27.91 b. $87.06 c. $93.64 d. $87.06
If saving is less than investment, the appropriate countercyclical monetary policy would be:
A. an open market sale of government bonds. B. a cut in the reserve requirement. C. a cut in the federal funds rate. D. a cut in the discount rate.
The National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union. A cap would limit the payroll of each team. League officials acknowledged that the teams have brought the problem on themselves by overspending and overpaying some players in an effort to compete for the best players. Why would the teams have caused this problem for themselves?
A. They tried to create a contestable market and now suffer because there are no barriers to entry. B. They were caught in the logic of the prisoner's dilemma in which each player maximizing his own self-interest leads to an outcome that is worse off for everyone. C. They used explicit collusion instead of implicit collusion. D. They tried to create a cartel and suffered the consequences of too much collusion.