When Fed policy is being used to offset an inflationary gap, which of interest rates, investment, net exports and aggregate demand moves in the opposite direction from the others?
a. Aggregate demand.
b. Investment
c. Net Exports.
d. Interest rates.
d
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Which of the following statements is true about productive and allocative efficiency?
A. Realizing allocative efficiency implies that productive efficiency has been realized. B. Productive efficiency can only occur if there is also allocative efficiency. C. Society can achieve either productive efficiency or allocative efficiency, but not both simultaneously. D. Productive efficiency and allocative efficiency can only occur together; neither can occur without the other.
Real standards of living can increase
A. if there is positive growth in the manufacturing sector. B. if the country is producing the same amount they traditionally have and are enjoying more leisure time. C. only if there is positive economic growth. D. only at the cost of increased urban congestion.
A monopoly sells 5 units of output at $20. If the MR of the 6th unit is $14, then the price of the 6th unit is
A. greater than $20. B. $19. C. also $14. D. $17.
The profit-maximizing manager of Big Farms wants to purchase a large piece of farm equipment. The manager has two financing options from two different banks. Big Bank will allow the manager to make five equal payments of $22,000 at the end of each of the next five years. Best Bank will allow the manager to make a payment of $10,000 at the end of the next four years and then make a balloon payment
of $72,000 at the end of the fifth year. If the interest rate is 4 percent, which of the following statements is true? A) The manager of Big Farms should select Big Bank's offer because the total repayment is less than the total repayment at Best Bank. B) The manager of Big Farms should select Big Bank's offer as the present value of the payment plan is $97,939.60, which is lower than the payment plan offered by Best Bank. C) The manager of Big Farms should select Best Bank's offer as the present value of the payment plan is $95,477.75, which is lower than the payment plan offered by Big Bank. D) The present value of the two payment plans is exactly the same, so the manager of Big Farms is indifferent between the two payment plans.