Define the following terms: a) risky outcome. b) probability
What will be an ideal response?
a) An outcome is risky if it is not known with certainty in advance.
b) Probability is the frequency with which an outcome occurs.
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Economists who favor policy activism argue that the United States economy is NOT always in equilibrium because
A) wage and price rigidities exist. B) the markets are over regulated. C) the Federal Reserve's monetary policy is too restrictive. D) the national debt is too large.
Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. Angus values playing the bagpipes at
A) $100. B) $150. C) $250. D) $600.
Suppose Lefty has utility characterized by the equation: U l = 3I 1/2 , where I is income. In addition, Righty has utility characterized by the equation: U r = 4I 1/2 , where I is income.
(A) If each had $100,000, which one would have the higher level of utility? (B) Illustrate Lefty's and Right's utility functions. (C) What equal amount of income could we give to both that would also give them the same level of utility?
The Open Market Committee oversees the money supply through the Fed's sale and purchase of government securities
a. True b. False Indicate whether the statement is true or false