If the social costs of an economic activity are $200 and the private costs are $200, then the external costs of the activity are ________, and market failure ________.
A. $0; does not occur
B. $400; occurs
C. $400; does not occur
D. $0; occurs
Answer: A
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Refer to Scenario 5.4. What is the standard deviation of the investment?
A) 0 B) 16.58 C) 56.12 D) 90.14 E) none of the above
The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,
a. relative to prices wages are higher and employment rise. b. relative to prices wages are higher and employment falls. c. relative to prices wages are lower and employment rises. d. relative to prices wages are lower and employment falls.
Suppose that a bank initially has a leverage ratio of 8 to 1. If this bank increases its capital by $1 million and its assets by $10 million, then the bank's:
A. leverage and risk increases. B. risk increases and its leverage decreases. C. leverage decreases and its liabilities increase. D. liabilities decrease and its leverage increases.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B