Given that income is $200 and the price of good Y is $40, what is the vertical intercept of the budget line?
A. 5
B. 1/5
C. 20
D. 8,000
Answer: A
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Economics is a social science rather than a “hard” science like physics because
A. economists abstract from reality when creating their theories. B. economics is easier to study than physics. C. economists must explain their theories to policy makers who lack formal mathematical training. D. economists study human behavior, which is affected by an unpredictable and vast range of influences.
The hypothesis that people believe the best indicator of the future is the recent past is known as:
a. rational expectations. b. adaptive expectations. c. lagged expectations. d. trend expectations.
The upward-sloping part of the long-run average total cost curve is a result of: a. economies of scale
b. diseconomies of scale. c. constant returns to scale. d. diminishing marginal returns.
The economy has been slowing, and the Fed wants to quickly give it a meaningful boost. However, the Fed does not want to make a public announcement or engage in a lot of political debate. Of the tools available to the Fed, which is its best option?
a. discount rate management b. interest rate changes c. reserve requirement alterations d. open market operations