Expansionary monetary policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be relatively ________ and real GDP to be relatively ________
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Answer: A
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Glen's friend Andre is a big strong guy. Andre will not allow anyone to harm Glen. Glen enjoys teasing people. In fact, Glen's marginal benefit of teasing people is given by: MB(Q) = 75 - 10Q. Generally, people do not enjoy Glen teasing them
Thus, they retaliate to Glen's teasing. Without Andre around to protect Glen from the retaliation, Glen's marginal cost of teasing people is MC(Q) = 20Q due to the retaliation. However, with Andre around, Glen perceives his marginal costs of teasing to always be zero as no one will retaliate with Andre around. This is because Andre will step in to protect Glen from retaliation. Without Andre around, what is Glen's choice for teasing? How much does Glen increase teasing when Andre's around? Is Glen's behavior characteristic of a moral hazard or adverse selection?
There is widespread ____ about the causes of poverty and widespread _____ about how to alleviate poverty.
A. agreement; agreement. B. disagreement; disagreement. C. agreement; disagreement D. disagreement; agreement.
Which of the following will NOT affect the elasticity of demand for a product?
A. the cost of producing the product B. the number of substitutes C. the percentage of the consumer's budget spent on the product D. how long consumers have to adapt to price changes E. all of the above will affect the elasticity of demand for a product
The adage, "There is no such thing as a free lunch," is used to illustrate the principle that
a. goods are scarce. b. people face tradeoffs. c. income must be earned. d. households face many decisions.