How sensitive is the structural deficit to the state of the economy?
A. It is insensitive to the state of the economy.
B. The structural deficit changes cyclically with the economy.
C. Changes in the structural deficit trigger opposite swings in the economy.
D. The structural deficit changes countercyclically with the economy.
Answer: A
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Banks develop statistical models to calculate their maximum loss over a given time period. This approach is known as the
A) stress-testing approach. B) value-at-risk approach. C) trading-loss approach. D) doomsday approach.
According to classical economists, in recessions, the government should
A) stimulate the economy to increase demand. B) actively use fiscal policy to combat the recession. C) increase the minimum wage so that poor people will be able to afford necessities. D) eliminate barriers to labor market adjustment, such as burdensome regulations on businesses.
Consider a car dealership that advertises a three-year lease at $250 per month. When you arrive to apply, you discover that the lease requires a down payment of $3600 dollars. You will undertake the lease if
A) you value the lease at least $350 per month. B) you value the lease at least $250 per month, the $3600 is a sunk cost. C) you value the lease less than $350 per month. D) you value buying a new car at $400 per month.
The slope of a straight line
A) is the same at all points along that line. B) cannot be defined. C) changes from one point to the next on that line. D) is always equal to zero.