Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. An increase in consumer income over this ten year period
b. A reduction in the price of residential phone service, a substitute for cellular phone service
c. An increase in the wages of workers in the cellular phone industry
d. Technological improvements that reduced the cost of supplying cellular phone service
d
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If stock exchanges did not exist,
A. the risk to the investor of buying stocks would be much greater. B. the economy’s resources could be more efficiently allocated among firms. C. there would be no organized way for firms to issue stock. D. investment banks would no longer play a role in handling stocks.
In calculating the IS curve, _______ is taken as exogenous
a. the interest rate. b. aggregate income. c. the price level. d. planned investment. e. a and d.
When the economy slows down the:
A. demand for workers increases. B. supply of workers increases. C. demand for workers decreases. D. supply of workers decreases.
Concerns about the bankruptcy of an appliance manufacturer diminish after a new CEO is appointed and some of the company's less productive factories are sold. What type of risk for bondholders falls? What happens to the interest rate on this company's bonds?