The Federal Open Market Committee (FOMC) meets on the first Tuesday of each month
Indicate whether the statement is true or false
False
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There has been some concern in the United States that people are not saving enough. This is a concern because
A) decreases in saving lead to decreases in labor productivity. B) decreases in saving lead to decreases in investment. C) decreases in saving lead to increases in the capital stock. D) decreases in saving lead to increases in consumption in the future.
Jan is a hyperbolic discounter. She puts weight 1 on utility earned in the current period but only weight .5 on utility earned in future periods. In period 1 she comes up with a plan, which involves taking some action that leads to a loss of C utils in period 2 but provides a benefit of B utils in period 3 . What values of B and C will lead her to behave inconsistently and not follow through on
her plans? a. C < B < 2C. b. B < C. c. B > 2C. d. B < C < 2B.
Suppose prices of personal computers fall significantly and consumers respond by buying more personal computers. The consumer price index
a. reflects this price decrease accurately. b. understates this price decrease due to the substitution bias. c. overstates this price decrease due to the income bias. d. overstates this price decrease due to the substitution bias.
Refer to the diagram. At P 2 , this firm will:
A. produce 44 units and realize an economic profit.
B. produce 44 units and earn only a normal profit.
C. produce 68 units and earn only a normal profit.
D. shut down in the short run.