A risk-averse individual prefers
A) the utility of expected income of a risky gamble to the expected utility of income of the same risky gamble.
B) the expected utility of income of a risky gamble to the utility of expected income of the same risky gamble.
C) outcomes with 50-50 odds to those with more divergent probabilities, no matter what the dollar outcomes.
D) outcomes with higher probabilities assigned to more favorable outcomes, no matter what the outcomes are.
E) outcomes with highly divergent probabilities so that one of the outcomes is almost certain.
A
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The M1 definition of the money supply includes all of the following EXCEPT
A) savings accounts. B) transaction deposits. C) currency. D) travelers checks.
If the price of gasoline rose 50% during a period in which the general price level rose 100%, economic theory would predict
A) a decline in the quantity of gasoline demanded. B) an increase in the quantity of gasoline demanded. C) a decrease in the demand for gasoline. D) an increase in the supply of gasoline. E) less driving by motorists.
Refer to Figure 28-2. Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough
A) the short-run Phillips curve would shift up. B) the economy would stay at point C in the long run. C) the economy would move back to point A. D) the short-run Phillips curve would shift down.
According to the classical model shown above, an autonomous decline in investment shifts the investment schedule to the left. Furthermore, the equilibrium interest rate declines. Distance A describes an interest rate induced
a. decline in saving, which is an equal increase in consumption. b. increase in investment. c. decrease in investment. d. decline in saving, which exceeds the increase in consumption.