Financial institutions are known as financial intermediaries because they serve as go-betweens, which link _____ and _____
a. the government; the taxpayers through IRAs
b. savers; borrowers
c. employers; employees
d. firms; the government
e. firms; consumers
b
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Which of the following statements is true?
A) Exponential growth refers to growth by the same amount in every time period. B) To depict variables that have exponential growth, it is more convenient to use an axis with a proportional scale. C) Linear growth refers to growth by the same proportion in every time period. D) To depict variables that have exponential growth, it is more convenient to use an axis with a linear scale. Consider two countries: country A and country B. At the beginning of year 2010, the GDP per capita in both countries is $2,400. The annual growth rate of output in country A is 3%, while the annual growth rate of output in country B is 5%.
If an increase in government spending of 40 units accompanied by an equal increase in taxes caused equilibrium income to rise by 40 units, the autonomous expenditure multiplier must be
a. 10. b. 1. c. 4. d. not enough information is given to calculate the multiplier.
The determinants of price elasticity of demand include:
A. availability of substitutes, cost relative to benefit, and scope of market. B. degree of necessity, cost relative to income, scope of market, and adjustment time. C. availability of complements, cost relative to income, and scope of market. D. cost relative to income, scope of demand, and adjustment time.
Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?
A. Your roommate is irrational. B. You roommate does not know his own preferences as well as you do. C. You constructed a model that made a prediction, and the prediction was refuted. D. Your roommate does not know what is in his own best interests.