According to economists, economic self-interest:
A. is a reality that underlies economic behavior.
B. has the same meaning as selfishness.
C. means that people never make wrong decisions.
D. is usually self-defeating.
Answer: A
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If the expected inflation rate changes, the long-run Phillips curve ________, and the short-run Phillips curve ________
A) shifts rightward; shifts upward B) does not shift; shifts upward C) shifts rightward; shifts downward D) shifts rightward; does not shift E) does not shift; does not shift
Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory
What will be an ideal response?
For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is lower in Denmark. b. The opportunity cost of producing cheese is lower in Denmark. c. The opportunity cost of producing watches is identical in both countries. d. It is impossible to compare opportunity costs because the two countries use different currencies. e. In Germany the opportunity cost of producing one pound of cheese is one watch.
Higher unemployment insurance benefits tend to increase unemployment because they
a. reduce the opportunity cost of job search and, hence, increase the search time. b. increase the opportunity cost of job search and, hence, increase the search time. c. reduce the opportunity cost of job search and, hence, decrease the search time. d. increase the opportunity cost of job search and, hence, decrease the search time.