During the 2007-2009 financial crisis, many households found themselves with debts to repay. How might this explain the consumer response to the 2008 Tax Rebate?
What will be an ideal response?
The temporary tax rebate did not add much to permanent income, so it's no surprise that most of the money was not added to current spending. However, the immediate reduction in household debt increases lifetime resources. Generally, the cost of debt service is higher than the expected return on saving, so permanent income rose further and gave some boost to current consumption.
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A perfectly competitive market arises when
A) the market demand is small relative to the output of a firm. B) there are many buyers but few sellers. C) the market demand is very large relative to the output of one seller. D) a firm has control over a unique resource. E) each of the many firms produces a slightly different product.
In a two-person repeated game, a tit-for-tat strategy is
a. When each player pursues his or her own self-interest without any cooperation b. When players start off as non-cooperative and then cooperate when one or both players show interest in colluding c. When players start off by cooperating and then mimic the other player's last move d. With neither players defecting
Which of the following is a game of perfect information?
A. Chess B. Poker C. Rock-Paper-Scissors D. Both chess and poker are games of perfect information.
Recall the Application about federal quality standards in the market for kiwifruit to answer the following question(s).Recall the Application. Prior to the federal marketing order in 1987, why were the California kiwifruit more likely to be sour?
A. It was less expensive to harvest the fruit when it was still immature. B. It was more expensive to harvest the fruit when it was still immature. C. The trees were still young and did not bear good fruit. D. The California kiwifruit that were sweet were sold to Canada.