The U.S. economy experienced deflation right after World War I and World War II
a. True
b. False
Indicate whether the statement is true or false
False
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Can the Federal Reserve achieve both low inflation and low levels of unemployment? Explain
What will be an ideal response?
The construction of the t-statistic for a one- and a two-sided hypothesis
A) depends on the critical value from the appropriate distribution. B) is the same. C) is different since the critical value must be 1.645 for the one-sided hypothesis, but 1.96 for the two-sided hypothesis (using a 5% probability for the Type I error). D) uses ±1.96 for the two-sided test, but only +1.96 for the one-sided test.
Bill has $10 to spend on a Superman, Batman, or an X-Men T-shirt. Bill buys the Superman T-shirt and the Batman shirt was a close second choice. What is the opportunity cost?
a. The amount he spent, $10. b. Nothing, since he got his preferred choice. c. The Batman T-shirt. d. The X-Men T-shirt.
The fact that over the long run the return on common stocks has been higher than that on long-term U.S. Treasury bonds is partially explained by the fact that:
A. There are regulations on the interest rates U.S. Treasury bonds can offer. B. The risk premium is higher on common stocks. C. A lot more money is invested in common stocks than U.S. Treasury bonds. D. Risk-averse investors buy more common stock.