An advantage of macroeconomic policy based on pre-specified rules might be that ________
A) it is easier to stick to long-run considerations and avoid bad long-run outcomes
B) it is more flexible than discretionary policy
C) it is easier to adapt to short-run changes and avoid a bad short-run outcome
D) all of the above
E) none of the above
A
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Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?
A) 10 percent B) -10 percent C) 20 percent D) -20 percent E) 100 percent
Financial intermediation is necessary because of
A) asymmetric information. B) adverse selection problems. C) the risk of moral hazard. D) all of the above.
Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm. The device costs $10,000. Using the Internal Rate of Return approach, the firm will make the investment
A) definitely. B) definitely not. C) if the interest rate exceeds 10%. D) if the interest rate is less than 10%.
The demand curve for any input is the MP curve
a. True b. False Indicate whether the statement is true or false