A period of significant decline in economic activity, marked by falling GDP, rising unemployment, and an increased number of bankruptcies, is called:
A. a boom.
B. a recession.
C. an expansion.
D. a severe depression.
Answer: B
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When the Fed lowers the federal funds rate, it can lead to
A) the Fed selling government securities. B) an increase in lending by banks. C) a decrease in demand deposits. D) a decrease in the quantity of money.
A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value. The shoe manufacturer believes that the advertisement will make
a. The demand for its product less elastic b. His customers less price sensitive c. Him able to raise prices d. None of the above
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and reserves account in the context of the Three-Sector-Model? a. The quantity of real loanable funds per time period falls and
reserves account becomes more positive (or less negative). b. The quantity of real loanable funds per time period falls and reserves account remains the same. c. The quantity of real loanable funds per time period and reserves account remain the same. d. The quantity of real loanable funds per time period rises and reserves account remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
If you can make $20,000 a year teaching, $25,000 a year typing, $30,000 a year driving a cab, and $40,000 a year as a chef, you have a comparative advantage in
A) teaching. B) driving a cab. C) being a chef. D) one of them but we need more information to know which.