As part of recent cutbacks, Paul just accepted a 10% cut in pay. Now he brews coffee at home instead of stopping at Starbucks every day. Based on this behavior, we can say home-brewed coffee:
A. and Starbucks coffee are -normal goods for Paul.
B. will become a normal good for Paul over time.
C. is an inferior good, while Starbucks coffee is a normal good for Paul.
D. is a normal good, and Starbucks coffee is an inferior good for Paul.
Answer: C
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Financial crises in advanced economies might start from a
A) debt deflation. B) currency crisis. C) mismanagement of financial innovations. D) currency mismatch.
Regulatory capture is where
A) governments take over monopolies through use of regulation. B) firms impose barriers to entry on regulators. C) regulators of an industry look out for the industry instead of society. D) the government taxes the profits of monopolies such that all producer surplus goes to the government.
One of the conditions that must exist for the median-voter theorem to hold is:
A. there is a simple in-favor/not-in-favor position held by each candidate. B. candidates win by majority vote. C. there must be a run-off election in the event of a tie vote between two or more candidates. D. voters may vote for a policy even if it not close to their own beliefs.
"Economic growth" has occurred if
A) inflation rate between this year and last year is zero or less. B) GDP this year exceeds the Real GDP this year. C) unemployment rate this year is above the natural rate of unemployment. D) Real GDP this year is greater than Real GDP last year.