Which of the following statements is true?
a. Federal budget deficits became progressively smaller during the 1990s and turned into a surplus by 1998
b. Federal spending declined relative to GDP, while federal revenues rose relative to GDP during the 1980s.
c. Functional finance says that policy makers should be concerned less with the economy's potential output and more with balancing the budget annually.
d. A disadvantage of functional finance is that it increases the level of unemployment during recessions.
e. A disadvantage of annual financed budget is that it dampens swings in the business cycle without increasing the national debt.
a
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When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost b. It is OK if the product on the market includes costly features your downstream division does not use c. it is OK if the product on the market is inexpensive because its quality is lower than you use d. if it is similar enough, it calls into question whether there are gains from producing it in-house
Which of the following is true regarding bonds? a. Other things equal, bondholders have greater financial security than stockholders. b. The possibility of a bond's value increasing greatly is limited compared to stocks. c. The legal obligation to bondholders is of higher priority than that of stockholders. d. Higher market interest rates represent a risk to bondholders
e. all of the above
Expansionary monetary policy increases bank reserves and the money supply, also decreases interest rates.
Answer the following statement true (T) or false (F)
In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased. Which of the following best explains the decrease in the price of gasoline?
A. The demand for gasoline increased, and the effect of the increase in demand on the gasoline price was less than the price effect of the decrease in supply. B. The quantity demanded of gasoline increased. C. The demand for gasoline remained unchanged. D. The demand for gasoline decreased, and the effect of the decrease in demand on the gasoline price was greater than the price effect of the decrease in supply.