Ceteris paribus, when market interest rates ________, ________ investment projects are undertaken.
A. decrease; less
B. increase; more
C. decrease; more
D. increase; no
Answer: C
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Answer the following statement(s) true (T) or false (F)
1. To make the most accurate predictions about a stock's future price, one must look at both the past pattern of prices and the current price of the stock. 2. In an efficient market, the current price reflects all available information. 3. The past performance of a stock is the best guide to future performance. 4. A speculative bubble is characterized by systematic undervaluing of stocks. 5. Efficient financial markets are called so because they produce an amount of financial products that maximizes total surplus in the financial industry.
Which of the following is not a method to internalize or adjust for externalities?
A. persuasion B. assignment of property rights C. unilateral transfers D. voluntary agreements
A production function may exhibit:
a. constant returns to scale and diminishing marginal productivities to all inputs. b. constant returns to scale and diminishing marginal productivities to all but one input, but at least one input must have a constant marginal productivity. c. constant returns to scale and diminishing marginal productivity to at most one input. d. constant returns to scale and diminishing marginal productivities for no inputs.