Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1000 - 5000rw. If rw = 0.05, and output = 5000, then absorption equals
A. 5050.
B. 5100.
C. 4950.
D. 4900.
Answer: A
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The advantage of game theory is that it allows us to focus on the
a. individual firm's incentives to cooperate or not b. relationship between the market and firm level demand curve c. costs and benefits d. government regulators and the firms in an industry e. models where there are no barriers to entry
If MUa/Pa = 100/$35 = MUb/Pb = 300/? = MUc/Pc = 400/?, the prices of products b and c in consumer equilibrium:
A) cannot be determined from the information given. B) are $105 and $140 respectively. C) are $105 and $175 respectively. D) are $100 and $200 respectively.
If the natural rate of unemployment equals 6 percent and the actual rate of unemployment equals 5 percent, then cyclical unemployment equals:
A. ?1.2 percent. B. -1 percent. C. 1 percent. D. 11 percent.
The creation of savings plans such as savings deposits and money market mutual accounts that allow easy transfer of funds between interest-earning assets and checkable deposits tends to
A) lower the cost of holding money. B) reduce the demand for money. C) increase the demand for money. D) increase the risk of holding money.